Stocks climb back after steep slide on Fed, Ukraine jitters

NEW YORK — Stocks finished a volatile day slightly higher on Monday after reversing a steep slide caused by uncertainty over inflation-fighting measures from the Federal Reserve and the possibility of conflict between Russia and Ukraine.

A late-day buying spree pushed the benchmark S&P 500 index to a 0.3% gain after pulling it out of so-called correction territory — a drop of 10% or more from its recent high. The Dow Jones Industrial Average had declined more than 1,000 points before rallying and ending higher.

“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.

Monday’s wild turnaround followed a three-week decline for the S&P 500, concluding with its worst weekly stretch since the start of the pandemic. The S&P 500 had been down as much as 4% Monday. The index has recovered from an intraday loss that big only three times in the past. The tech-heavy Nasdaq index rose 0.6% after recovering from a nearly 5% descent.

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 raising 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 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.