By Peter Nurse and Liz Moyer
Investing.com -- U.S. stocks gave up gains and turned negative on Monday on worries over the Russia-Ukraine conflict and uncertainty ahead of the eagerly-awaited Federal Reserve policy meeting.
At 4:04 PM ET, the Dow Jones Industrial Average was flat. The S&P 500 was down 0.7%, and the NASDAQ Composite fell 2%.
The fourth round of talks between Ukraine and Russia took place Monday but there was little sign of progress toward a ceasefire after a weekend of continued violence.
The Dow fell 2% last week, its fifth negative week in a row, while the S&P and the Nasdaq dropped 2.9% and 3.5% for the week. These indices have dipped into correction territory, all more than 10% below their all-time highs.
The S&P will end 2022 about 1% lower, said Goldman Sachs, in a note, trimming its year-end target for the benchmark index to 4,700 from 4,900, citing the surge in commodity prices on the back of the conflict in Ukraine.
Aside from the events in Eastern Europe, the main focus this week will be on Wednesday’s Federal Reserve policy meeting.
The U.S. central bank is widely expected to lift interest rates by 25 basis points, its first hike since 2018. This is likely to be the start of a series of interest rate increases, with inflation rising last week to 7.9%, a 40-year high and far above the Fed’s 2% target.
Also of interest will be comments from Fed Chairman Jerome Powell following the decision, given the uncertainty surrounding the economic outlook as the Ukraine-Russia conflict exacerbates global supply disruptions.
U.S. and China are set to hold their first high-level, in-person talks since Russia’s invasion later Monday after U.S. officials over the weekend said Moscow had asked Beijing for military equipment in the early stages of the war.
Also prompting further caution was the news of surging Covid cases in China, with the mainland reporting the highest daily figure in two years on Sunday, prompting the lockdown of the city of Shenzhen, the country’s main tech hub.
The Chinese tech sector as a whole traded sharply lower Monday amid fears a number of companies will be delisted from New York for not meeting auditing requirements.
Oil prices weakened Monday, extending last week’s decline on hopes for progress in the diplomatic efforts to end the Ukraine war as well as the Chinese Covid lockdown.
By 4:05 ET, U.S. crude futures traded 7% lower at $101 a barrel, while the Brent contract fell 6% to $105.
Additionally, gold futures fell 1.5% to $1,955/oz.
This story was originally published at 6:50 AM ET and updated.