ASX set to open higher despite Wall Street slide

Stocks closed broadly lower on Wall Street on Friday, capping a turbulent week of trading on Wall Street as uncertainty about the war in Ukraine and surging inflation continue to roil markets.

The S&P 500 fell 1.3 per cent after having been up 0.7 per cent in the early going. The benchmark index marked its fourth losing week in the last five, even though it surged in the middle of the week and had its best day since the summer of 2020. The Dow Jones Industrial Average dropped 0.7 per cent and Nasdaq composite slid 2.2 per cent. Both also posted a weekly loss.

European stocks fared better, closing solidly higher. Oil prices ended 3.1 per cent higher after flip-flopping earlier.

The Australian sharemarket is poised for a positive start to the week, with futures on Saturday pointing to a gain of 20 points, or 0.3 per cent, at the open.

The moves are the latest swings for global markets, which have been rocked by dramatic hour-to-hour reversals in prior weeks as investors struggle to guess how high Russia’s invasion of Ukraine will send prices of oil, wheat and other commodities produced in the region. That’s raising the risk the economy may struggle under a toxic combination of persistently high inflation and stagnating growth. The Federal Reserve is expected to raise interest rates at its meeting next week.

Despite some positive moves by stocks early Friday, uncertainty about the next developments in the conflict in Ukraine and what the Fed will do likely kept investors in a selling mood heading into the weekend, said Willie Delwiche, investment strategist at All Star Charts.

“This remains a headline-driven market,” Delwiche said. “We’re in this environment where you get these exaggerated day to day swings, but you don’t make any progress.”

Early Friday, before Wall Street opened, the pendulum was swinging toward optimism. European stocks and US stock futures rose abruptly after comments from Russian President Vladimir Putin that some analysts saw as surprisingly optimistic. Putin cited “certain positive developments” in negotiations with Ukraine, though he didn’t offer any details.

The S&P 500 opened with a 0.7 per cent gain, but it quickly flipped to a loss after a reading on sentiment among US consumers sank more than economists expected. Household expectations are rising for high inflation to remain in the near term, causing unease. The S&P ended down 55.21 points at 4,204.31.