US open: Investors take risk off the table ahead of potentially grim weekend

Stocks on Wall Street came under renewed selling pressure at the end of the week as traders opted to take some risk off the table ahead of a headline-prone weekend given the grim situation in Ukraine.

Case in point, investors in Asia and Europe had woken up to reports that Russian forces had shelled a building in the compound housing Europe's largest nuclear reactor, although the situation was later reported to be fully under control.

A slightly mixed jobs report for February did little to boost investor sentiment, even as some observers held out the hope for a negotiated resolution to the war in Ukraine.

As of 1551 GMT, the Dow Jones Industrials was falling by 1.45% or 488.17 points to 33,295.23, alongside a 1.6% or 68.56 point drop for the S&P 500 to 4,296.60 and a 1.8% or 244.31 point slide on the Nasdaq Composite to 13,292.60.

Volatility in equity markets remained at a heightened level as shown by a 9.15% jump in the CBoE's volatility index for the S&P 500.

In parallel, the US dollar spot index was hitting another 52-week high, climbing 0.96% to 98.72, while the yield on the benchmark 10-year US treasury note was off by 13 basis points at 1.71%.

"Stocks have been abandoned today, perhaps in no small part because the non-farms reading was so strong. This removes any cover Powell might have had for rowing back on rate hikes, since (for now at least) the US economy is in excellent health when it comes to job creation," said Chris Beauchamp, chief market analyst at IG.

"But the war seems to override everything else, and with gold back on the up and oil prices rising again too investors are going back to what works."

For their part, the day before, analysts at Bank of America had recommended to clients that they be "maximum defensive".

According to the Department of Labor, growth in non-farm payrolls accelerated to a pace of 678,000 last month, easily beating forecasts for a rise of 400,000.

However, average weekly earnings came in flat month-on-month, a big miss given that the consensus forecast was for a jump of 0.6%.

Nevertheless, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the soft reading on wages was more likely "noise rather than signal" and that a rebound was likely in March.

He added that: "still, such a low print does serve as a reminder that wages won't necessarily continue to rise at a very rapid pace if labor supply continues to increase."

On the geopolitical side of things, Kremlin spokesman, Dmitry Peskov, said that Moscow had conveyed to Kyiv its vision of how to solve current problems at recent talks.

"Going forward, everything will depend on the reaction of the Ukrainian side," Peskov said.

"If there was ever any possibility that this war would end with the complete subjugation of Ukraine by force of arms this has now gone," Lawrence Freedman, emeritus professor of war studies at King's College London had speculated the day before.

"[...] Nor will it end with Russian forces being chased out of the country. Most likely there will be a negotiated conclusion, probably at the cease-fire talks."