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Dow surges 835 points as index rallies on final day of volatile week

The S&P 500 and Nasdaq also jumped despite Russia’s ongoing invasion of Ukraine

Traders work on the floor of the New York Stock Exchange on Thursday, a session in which the Dow, S&P 500 and Nasdaq overcame sharp losses to close in positive territory. (Michael M. Santiago/Getty Images)

Wall Street posted a massive rally Friday to finish off a turbulent week, with the Dow soaring 835 points even as investors monitored Russia’s continued incursion into Ukraine and the responses from the United States and its allies.

The S&P 500 and tech-heavy Nasdaq indexes also notched big gains.

This came after global markets rebounded following several days of Russian attacks across Ukraine. European indexes rallied 3 percent or more across the board, while Asian markets closed in positive territory with the exception of Hong Kong’s Hang Seng Index.

Even Russia’s MOEX index, which cratered more than 33 percent Thursday in one of the biggest crashes in equity market history, bounced back nearly 21 percent.

Anthony Denier, chief executive of the trading platform Webull, said U.S. markets had moved higher because investors believe that the fallout from the Russia-Ukraine conflict “is not going to have a big enough global effect to send the U.S. into a recession.”

“They also may be thinking that the Russia situation may make the Fed a little less hawkish,” Denier told The Washington Post in an email, adding that investors should expect volatility to be “the new normal” as long as the conflict continues.

U.S. economy appeared ready to surge, but Russia’s invasion of Ukraine could send shockwaves

The Dow Jones industrial average closed up 2.5 percent. The broader S&P 500 index surged about 2.2 percent, while the Nasdaq added 1.6 percent.

The gains come as investors make “slightly queasy calculations about the extent to which the economic and market impact of Russia’s invasion will be contained,” Russ Mould, investment director at AJ Bell, said Friday in comments emailed to The Post. “Along with higher energy prices, we are getting almost constant reminders that war will only add to the current inflationary pressures.”

Volatility raged in global trading in the run-up to the invasion, with stocks selling off sharply and all three major U.S. indexes entering correction territory briefly as investors parsed a sea of conflicting signals and threats. Although investors typically shrug off geopolitical tensions, the Ukraine crisis has weighed heavily on the markets because of Russia’s central role in global energy markets. Russia produces about 10 percent of the world’s oil supply, on par with the United States and Saudi Arabia, and surging energy costs will ripple quickly through the global economy.

Markets loathe uncertainty, and the Russian attack is arriving at a moment when the economic recovery is under pressure from soaring inflation, chaotic supply chains, labor shortages and other pandemic-era stressors. Investors are betting that the conflict will stall planned interest rate hikes — central banks’ greatest weapon against inflation — as the potential costs tied to energy market disruption could send prices through the roof.

War in Ukraine: Live Updates

Russia’s invasion of Ukraine has “significantly changed the Fed’s monetary policy debate in the near term,” Ivan Feinseth, chief investment officer at Tigress Financial Partners, said Friday in comments emailed to The Post.

On Thursday, President Biden announced an unprecedented package of sanctions targeting Russian financial institutions and the nation’s business and political elites. The United States and its allies have now targeted all 10 of Russia’s largest financial institutions through a combination of “full blocking” sanctions, which choke off all transactions with U.S. entities; “correspondent” sanctions, which bar transactions with U.S. banks; and debt and equity sanctions on institutions holding nearly 80 percent of Russian bank assets, the White House said.

Russia has warned that Americans will fully feel the “consequences” of the sanctions. U.S. businesses have been warned to prepare for possible cyberattacks, and Biden has acknowledged that the crisis could lead to higher gasoline prices. In remarks Thursday, he insisted he will do everything in his power to limit Americans’ pain at the pump and said the United States is “prepared to respond” to cyberthreats to companies and infrastructure.

For all the financial whiplash associated with the conflict, no nation has faced higher costs than Russia. The MOEX index’s rout Thursday during the invasion wiped tens of billions off the value of Russian firms, while the ruble plunged to a record low. Other costs have been piling up, with Russia being stripped of the chance to host the Champions League Final, Europe’s most prestigious club soccer competition. Formula 1′s Russian Grand Prix, scheduled to take place in Sochi in September, has also been canceled in light of the invasion.

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Oil prices skidded lower Friday amid the sanctions and fears of disruption. Brent crude, the international oil benchmark, shed 1.4 percent to trade around $94 per barrel. West Texas Intermediate crude, the U.S. oil benchmark, also dropped 1.4 percent.

Since December, oil prices have risen more than 40 percent, influenced in part by speculation that Russian President Vladimir Putin was preparing to launch an attack. Earlier this week, amid the shock of the invasion, prices breached $100 per barrel for the first time since 2014.

Travel stocks such as Airbnb declined Friday as investors worried about the war’s potential fallout on hotels, cruises and airlines. Scott Keyes, founder of Scott’s Cheap Flights, said the invasion bodes ill for travelers because it will cause the cost of jet fuel to spike (a cost that will be passed on to customers). Russian airspace is also highly trafficked, part of many major international routes, Keyes said.

“If a war results in western airlines no longer willing to enter Russian airspace, that will result in much longer, more circuitous routes to Asia and the Middle East,” Keyes said in comments emailed to The Post. “More fuel, more pilot hours, more connecting flights, and higher prices.”

Gold, a Russian export and investor safe haven, also swung lower Friday, declining nearly 2 percent.

Government bonds, another investor haven, saw recovery, with the yield on the 10-year U.S. Treasury note edging close to 2 percent. Bond yields move inversely to prices.