Global stocks declined amid the war in Ukraine, mounting inflation and a resurgence of COVID-19 infections in Europe and Asia. As Russian tanks rolled across the Ukrainian border, commodity prices moved sharply higher, contributing to worldwide inflationary pressures. International sanctions sent Russian stocks and bonds and the ruble plummeting.
Bonds also came under intense pressure as central banks around the world sought to tame high inflation by raising interest rates. Despite the Ukraine conflict, the U.S. Federal Reserve and the Bank of England both hiked rates during the quarter while European Central Bank officials indicated they would do the same later in the year.
Consumer discretionary stocks experienced the biggest losses as investors feared a wider conflict in Europe and a potential war-induced recession. Information technology and communication services companies also tumbled as growth-oriented stocks fell out of favor. In contrast, energy stocks soared on skyrocketing oil and gas prices.
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