Wall Street Opens Higher After Putin Says No Plans for Further Troop Mobilization

Russian President Vladimir Putin gestures during a press conference after attending a summit with leaders of post-soviet countries of the Commonwealth of Independent States (CIS) in Astana, Kazakhstan on Oct. 14, 2022. Valery Sharifulin/SPUTNIK/AFP via Getty Images

Wall Street opened higher on Friday after Russian President Vladimir Putin denied further plans for more troop mobilization in the Ukraine conflict.

However, the market later tumbled after major banks reported a drop in earnings.

Putin’s earlier announcement to partially mobilize 300,000 reservists sparked panic in global markets last month.

Putin told reporters—following a summit in Kazakhstan on Friday—that now nothing additional is being planned.

“No proposals have been received from the defense ministry and I don’t see any additional need in the foreseeable future,” he said reported The Financial Times. “Now 222,000 people have been mobilized out of 300,000. Within about two weeks, all mobilization activities will be completed.”

Stock losses increased on Friday after a University of Michigan survey showed that America’s inflation expectations were rising again after dipping in the summer.

Record-High Inflation

Meanwhile, record-high inflation has raised concerns that the Federal Reserve’s aggressive push to raise interest rates, might slow the economy too hard into a recession during the corporate earnings season.

Investors have been closely following the earnings season for any impact on corporate performance from inflation and the Fed’s response.

An NYSE sign is seen on the floor at the New York Stock Exchange in New York, on June 15, 2022. Seth Wenig/AP Photo

Consumer sentiment for September was 9.8 points, close to the all-time low reached in June of this year.

The tech-heavy Nasdaq witnessed losses, as many high-end tech companies are most sensitive to interest rate hikes.

The University of Michigan’s October preliminary report for a one-year inflation outlook rose to 5.1 percent from 4.7 percent in September.

The five-year inflation outlook increased to 2.9 from 2.7 percent last month.

The release of the latest consumer price index data weighed heavily on Friday, which showed inflation coming in hotter than expected last month.

“With core CPI still moving in the wrong direction and the labor market strong, the conditions are not in place for a Fed policy pivot, which would be one of the conditions for a sustained rally in the equity market,” wrote UBS global wealth management chief investment officer Mark Haefele in a Friday note, according to CNBC.

This initially slightly weighed on markets, since investors had prepared for the Fed’s third consecutive 75-point basis rate hike.

“Moreover, as inflation remains elevated for longer and the Fed hikes further, the risk increases that the cumulative effect of policy tightening pushes the US economy into recession, undermining the outlook for corporate earnings,” he added.

Meanwhile, the firing of U.K. finance minister Kwasi Kwarteng and the partial retraction of Prime Minister Liz Truss’ economic plans on Friday, has been viewed as a desperate attempt by her government to survive self-inflicted political and economic turmoil.

The Dow Jones Industrial Average fell 403.89 points at the end of week trading, to end the day at 29,634.83.