Concerns that the US economy could be heading for a recession have been raised by the invasion of Ukraine.
Wall Street strategists worry that the invasion could cause oil prices to go up and cause inflation to go up. The prices of wheat and other commodities have gone up.
Analysts said that stronger inflation could hurt growth by making the Federal Reserve raise interest rates harder than expected.
The recent surge in commodity prices may be enough to tip the global economy into recession, according to a Friday note.
The chief investment strategist at Bank of America said that recession risks are on the rise. He thinks the S&P 500 will end the year at 4,600, which is one of the most pessimistic forecasts on Wall Street.
Hartnett said in a note that the Russian invasion of Ukraine should cause inflation tobate, which is likely to require more central bank tightening. He said that high inflation is unlikely to end until the economy is hit with a recession shock.
Russia invaded Ukraine on Thursday after building up troops for months. The move was denounced by the international community.
The US, UK and Europe imposed sanctions on Russia. They stopped short of attacking the energy industry because they were afraid it would cause energy prices to go up even more.
As supply has struggled to keep up with demand and as tensions have risen in eastern Europe, the price of crude oil has rallied dramatically.
At the beginning of the year, the global benchmark oil price was around $77 a barrel. Russia invaded on Thursday and it rose above $105.
Some investors were already concerned that the Fed's plans to raise interest rates hard in 2022, to tackle the strongest inflation in 40 years, could lead to a sharp slowdown in growth. The Russia-Ukraine conflict has added to those fears.
If the Russia-Ukraine conflict leads to sharply lower supplies, Goldman Sachs analysts said oil could hit $125 a barrel in the coming months.
With consumers feeling the squeeze at the gas pump and in their power bills, the CEO of Rystad Energy thought oil could surge to $130 a barrel.
As Russia sends troops into Ukraine, the investment chief for a firm managing $260 billion shares his outlook on 4 common strategies investors use to handle geopolitical risk.
There could be a negative impact on global growth if Western allies decide to sanction Russia's energy sector.
Financial markets were stable Friday, a sign that investors were no longer concerned about the situation.
The economic impact of the conflict could be smaller than expected because of the US and EU reluctance to impose sanctions on Russian energy exports.
US President Joe Biden has vowed to do everything in his power to limit the pain the American people are feeling at the gas pump.
The S&P 500 is expected to rally to 5,050 by the end of the year, according to the head of US equity strategy at RBC.
Calvasina said in a note that investors should be on the lookout for a positive inflection in the stock market.
The reality is that energy prices are going to go up significantly. Other implications of the conflict pale compared to the potential human cost on both sides, said the energy consultant.
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