Stocks cautious as international tensions persist

  • Market loses ground in choppy trading against Russia–Ukraine story
  • Gold hits $1,900, mining stocks drive materials sector
  • This week: Retail earnings, Fed inflation, housing numbers

Another week, another dose of market volatility—but this time inflation wasn’t the main culprit.

US stocks lost ground for the fifth week out of the past seven as the uncertainties of the Russia–Ukraine situation appeared to keep investors off balance, pushing the latest inflation data and Fed speculation to the back burner.

The S&P 500 (SPX) seesawed day to day amid conflicting reports that Russia was withdrawing troops from the Ukrainian border vs. assertions from the US that Russia was actually increasing its military presence:1

Chart 1: S&P 500 (SPX), 12/28/21–2/18/22. S&P 500 (SPX) price chart. Geopolitical whipsaws.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

The headline: Russia–Ukraine concerns fuel latest market swings.

The fine print: Last Tuesday’s Producer Price Index (PPI) number came in above estimates—and just shy of December’s record reading, which was revised higher—but stocks rallied, apparently focusing on the reports of Russian troop drawdowns. January retail sales surprised to the upside (+3.8%), although December’s number was revised lower, from -1.9% to -2.5%.

The number: $5.4 billion. That’s how much Intel (INTC) will pay to acquire Tower Semiconductor (TSEM), part of Intel’s push to expand its chip-manufacturing footprint.2

The scorecard: It was red across the board, but the Russell 2000 (RUT) was the strongest major US index for a second week in a row:

US stock index performance table for week ending 2/18/20. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Sector roundup: The strongest S&P 500 sectors last week were consumer staples (+1%), materials (-0.3%, again led by metals and mining stocks), and consumer discretionary (-0.5%). The weakest sectors were energy (-3.8%), communication services (-2.5%), and financials (-2.4%).

Highlight reel: On Monday Cornerstone Building (CNR) +22% to $22.44, Tower Semiconductor (TSEM) +42% to $47.07 on Tuesday. On the downside, Amplitude (AMPL) -59% to $17.1 and Fastly (FSLY) -33% to $19.20 on Thursday.

Futures action: April gold (GCJ2) hit its highest levels since last June, tagging $1,900/ounce last Thursday and $1,905 intraday on Friday before ending the week at $1,899.10. After starting last week by rallying to a new contract high of $93.83/barrel, April WTI crude oil (CLJ2) retreated the remainder of the week, closing Friday at $90.21. Biggest up moves: April natural gas (NGJ2) +11.3%, April hogs (HEJ2) +7%, March palladium (PAH2) +6.6%. Biggest down moves: May cocoa (CCK2) -6.1%, February bitcoin (BTCG2) -5.5%, February ether (ETHG2) -4.8%.

Coming this week

In addition to housing numbers and durable goods, this week features the latest reading from the Fed’s go-to inflation gauge, the PCE Price Index:

Today: S&P Case-Shiller Home Price Index, FHFA Home Price Index, Markit PMI Flash, Consumer Confidence
Thursday: GDP (Q4, second estimate), Chicago Fed National Activity Index, New Home Sales
Friday: Durable Goods Orders, Personal Income and Spending, PCE Price Index, Pending Home Sales, Michigan Consumer Sentiment

It may be a short week, but there’s no shortage of earnings, with retail and consumer names figuring prominently:

Today: Home Depot (HD), HSBC (HSBC), Medtronic (MDT), Verisk Analytics (VRSK), RingCentral (RNG), Toll Brothers (TOL), Agilent Technologies (A), Palo Alto Networks (PANW)
Wednesday: eBay (EBAY), Five9 (FIVN), Lowe's (LOW), Molson Coors (TAP), TJX (TJX), Booking Holdings (BKNG), Lemonade (LMND), iRhythm Technologies (IRTC), Revolve (RVLV)
Thursday: Carvana (CVNA), Moderna (MRNA), Lloyds Banking (LYG), Anheuser-Busch InBev (BUD), Newmont (NEM), Alibaba (BABA), Keurig Dr. Pepper (KDP), Coinbase (COIN), Occidental Petroleum (OXY), Beyond Meat (BYND), Etsy (ETSY), Zscaler (ZS)
Friday: LendingTree (TREE), Foot Locker (FL)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

Market Mover Update: UK stocks lost ground with the rest of global equities last week, but Britain’s benchmark FTSE 100 index lost less than one-sixth of what the SPX did (-0.24% vs. -1.58%). All three of the stocks discussed in “Trading across the pond” are scheduled to release earnings this week. AutoNation (AN) ended a choppy week with a 2.7% gain on Friday after beating earnings estimates (see “Auto stock shifting gears?”).


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1 Bloomberg. Biden Sees ‘Very High’ Probability of Invasion: Ukraine Update. 2/17/22.
2 The Wall Street Journal. Intel Agrees to $6 Billion Deal to Buy Tower Semiconductor. 2/15/22.

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