Jitters over Ukraine, Fed meeting send stocks on wild ride

NEW YORK — Stocks ended a wild ride Monday with modest gains after the Dow Jones Industrial average shed more than 1,000 points in early trading on uncertainty surrounding tensions in the Ukraine and inflation-fighting measures by the Fed.

The late-afternoon comeback pulled the S&P 500 out of so-called correction territory — a drop of 10% or more from its recent high.

The market’s gyration reflected investors’ uncertainty over how aggressive the Federal Reserve’s inflation-fighting measures will be and the possibility of conflict between Russia and Ukraine.

“We’re in this wait-and-see mode, which is almost the most uncomfortable place to be, so I think the market is really grappling with that,” said Lindsey Bell, chief markets and money strategist at Ally Invest.

The S&P 500 ended 0.3% higher after having been down about 4%. The index has come back from a loss that big to notch a gain only three other times in the past. The tech-heavy Nasdaq index rose 0.6% after recovering from a nearly 5% plunge.

Early in the day, benchmark stock indexes flirted with near 4-month lows as investors anticipated guidance from the Fed later this week about its plans to raise interest rates to tame inflation, which is at its highest level in nearly four decades.

The Fed’s short-term rate has been pegged near zero since the pandemic hit the global economy in 2020 and that has fueled borrowing and spending by consumers and businesses.

But rising prices at supermarkets, car lots and gas stations are heightening concerns that consumers will pare back spending to limit the pressure on their budgets. Companies have warned that supply-chain problems and higher raw materials costs could crimp their profits.

The Fed is scheduled to make a policy statement on Wednesday.

“I’m hoping the Fed will calm markets at its meeting, because the selling has been so massive,” Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder, which has about $8 billion in assets, said in an interview. “There’s been a lot of panic selling, aggressive selling, though I think that when it does reverse, it could reverse very quickly.”

The Fed has kept downward pressure on longer-term interest rates by buying trillions of dollars worth of government and corporate bonds, but those emergency purchases are scheduled to end in March. Nudging rates higher is intended to help slow economic growth and the rate of inflation.

Investors are also keeping an eye on developments in Ukraine. Tensions soared Monday between Russia and the West over concerns that Moscow is planning to invade Ukraine, with NATO outlining potential troop and ship deployments.