Stocks were already off to a bumpy start to 2022, with the S&P 500 Index down 10% year -to date on the day Russia invaded Ukraine (2/24/22). While some of the weakness before the invasion reflected anticipation of Russian aggression, as troops moved toward the Ukraine border and drove oil prices higher, stocks had already taken cues from the expected increase in inflation and implications for the Federal Reserve (Fed).
Since then, the broad index is little changed, suggesting that military conflict and higher inflation may have already been priced in—and that markets generally do not expect direct NATO involvement (other than supplying weapons and not jets). The year-to-date decline for the index, now about 12%. Download the following PDF from LPL Financial for more information.
