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Market Snapshot: Stocks end lower Friday, slump for a second straight week on Russia-Ukraine tensions

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U.S. stock index futures edged up early Friday as talks planned for next week between Russia and the U.S. over Ukraine eased investor worries after the Dow Jones Industrial Average saw its worst day of 2022 on Thursday as investors dumped risk assets amid fears of war in eastern Europe.

Bond yields and the dollar were little changed, while gold and the yen slipped.

How are stock index futures performing?

The Dow Jones Industrial Average futures
YM00,
+0.39%

were up 140 points or 0.41% at 34, 371

S&P500 index futures
ES00,
+0.54%

were up 23.50 points or 0.54% at 4,398

Nasdaq futures
NQ00,
+0.76%

were up 100 points at 14,264.

On Thursday the Dow Jones Industrial Average
DJIA,
-1.78%

dropped 622.24 points, or 1.8%, to close at 34,312.03, its largest one-day point and percentage drop since Nov. 30. The S&P 500
SPX,
-2.12%

slumped 94.75 points, or 2.1%, to finish at 4,380.26. The Nasdaq Composite
COMP,
-2.88%

tumbled 407.38 points, or 2.9%, to finish at 13,716.72. Losses for the S&P 500 and Nasdaq were the largest since Feb. 3.

What is driving the market?

U.S. equity futures edged up after Russian Foreign Minister Sergei Lavrov agreed to meet U.S. Secretary of State Antony Blinken for talks in Europe next week. On Thursday, President Joe Biden warned that the probability of an invasion of Ukraine is still “very high.” 

Markets are being driven by Ukraine-Russia news, with NATO accusing Moscow of misleading the world over troop withdrawals this week, saying that country had instead moved in about 7,000 additional soldiers, though Russia still claimed it was withdrawing troops.

With tensions already at their highest level since the Cold War, the Russian military announced Friday that President Vladimir Putin will monitor a sweeping exercise of the country’s nuclear forces Saturday that will involve multiple practice missile launches, a stark reminder of the country’s nuclear might amid the showdown with the West.

Benchmark U.S. stock indexes heading for a second week of losses, undermined by the standoff between Russia and the West over Ukraine as well as the prospect of tighter Federal Reserve monetary policy. Some $2.2 trillion of U.S. stock options are set to expire Friday also and may exacerbate volatility. 

Bets on a sharper Fed interest-rate rise in March have eased somewhat in light of geopolitical tension, but investors remained concerned by the question of how markets will cope as fiscal and monetary stimulus ebbs.

St. Louis Federal Reserve President James Bullard, who has called for more aggressive rate increases than his colleagues, on Thursday said too much “mindshare” has been devoted to the idea that inflation will moderate at some point.

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