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The stock market was once again dominated by the situation in Russia. On Thursday, Russia invaded Ukraine, causing the market to open sharply lower. At one point, the Dow Jones Industrial Average and S&P 500 were both down more than 2 percent.

Later in the day, the market made a stunning reversal. After being down 859 points, the Dow finished the day with a gain of 92.07 points. The S&P 500 made a similar comeback. After trading down more than 2.6 percent, it finished the day with a 1.5 percent gain. And the NASDAQ closed the session 3.3 percent higher after being down 3.5 percent earlier in the day.

During the day, investors appeared to go bargain hunting, buying tech stocks during the dip. Stocks like Netflix, Amazon, Microsoft, and Alphabet were down sharply during the day but finished higher. Microsoft finished up 5.1 percent, Netflix gained 6.1 percent, and Alphabet closed up 4 percent.

On Friday the markets continued to rally, with the S&P 500 gaining 2.24 percent, Dow Jones Industrial Average 2.52 percent and the NASDAQ 1.64 percent. For the week, the S&P 500 returned 1.20 percent, Dow Jones Industrial Average 0.24 percent and the NASDAQ 2.01 percent.

Even though the markets staged an amazing comeback, the S&P 500 remains in a correction, more than 10 percent off its record close in early January. The NASDAQ started Thursday in a bear market at more than 20 percent below its record high in November. After Thursday’s reversal, the NASDAQ is still down 16 percent from its all-time highs.

Russia’s invasion of Ukraine caused oil prices to spike over $100 per barrel for the first time since 2014. Surging oil prices could cause inflation to continue or even increase, which may cause the Federal Reserve to raise rates even more aggressively. Or, it could cause the Fed to completely rethink its tightening policy if the markets and the economy start showing weakness.

Gold is usually considered a safe haven during geopolitical problems. On Thursday, gold jumped 3 percent, hitting a one-year high at $1,970 per ounce. Like gold, bonds are also considered a safe haven, saw prices climb and yields fall. Investors did not consider Bitcoin a safe haven on Thursday, as it fell 7 percent to around $35,100.

Economic news for the week included the weekly jobless report, which was reported lower than expected. Initial filings for unemployment insurance claims came in at 232,000 for the week ending February 19. This figure was 3,000 less than the estimated figure and down 17,000 from the previous week.

Continuing claims totaled 1.48 million, a drop of 112,000 from the previous week and the lowest figure since March 1970. The total number of those getting unemployment benefits dropped 30,000 to 2.03 million. Even though these figures show improvement, total employment numbers are still 1.7 million below what they were in February 2020. The unemployment rate has fallen from a pandemic peak of 14.7 percent to the current rate of 4 percent.

Also released was the core personal consumption expenditures price index, which showed a 5.2 percent increase from a year ago, the highest level since 1983. Including energy and food, the personal consumption expenditure price index came in at 6.1 percent, showing that prices are rising at their fastest level in almost 39 years.

Consumer spending increased faster than expected, rising 2.1 percent for the month versus the estimated 1.6 percent increase. Also reported was the better-than-expected news that orders for long-lasting goods rose 1.6 percent in January, compared to the estimate of a 0.8 percent gain.

The economy continued to grow and do well with a slightly higher revision of the GDP. Initially, it was reported at 6.9 percent, and the revision put the GDP at 7.1 percent. This brings the full-year growth to 5.7 percent, which is the fastest growth rate since 1984. The annualized rate during the fourth quarter came in at 7 percent.

The housing market saw new home sales fall 4.5 percent to a seasonally adjusted annual rate of 801,000 in January. The sale of new single-family homes fell more than expected last month, mainly due to rising mortgage rates and the continuation of high prices that are continuing to keep many first-time buyers away from the housing market.

In January, home sales dropped 19.3 percent on a year-to-year basis. Sales peaked at a rate of 993,000 units back in January 2021, which was the highest level seen since the end of 2006. The week ended with the average rate for a 30-year fixed-rate mortgage at 4.36 percent. The average for a 15-year fixed mortgage is 3.52 percent.

The median price for a new home in January rose 13.4 percent from a year ago to $423,300. There are 406,000 new homes on the market, up from 394,000 units last December.

There was continued volatility on Wall Street due to the situation with Russia and Ukraine and what the Fed will eventually do with rates next month. The markets finished with the S&P 500 Index down 1.6 percent and the Dow Jones Industrial Average losing 1.9 percent. The NASDAQ lost 1.8 percent for the week.

Some traders are waiting for more of a capitulation or flush before stepping back into the markets. But for some stocks, that has already happened. A handful of stocks in the Russell 1000 dropped 15 percent or more this past week. These stocks include Roku, DraftKings, Fastly, Albemarle and Paramount Global. The tech sector continues to get hit the hardest, with the iShares Expanded Tech-Software Sector ETF dropping 5.4 on the week.

There were reports early in the week that Russia had begun to pull back troops from the Ukrainian border, which sent the markets higher for the day. But the rally didn’t last long when both the U.S. and NATO reported that Russia had not moved its troops. In fact, Russia had increased its troops along the border. On Monday, the U.S. closed its embassy in Kyiv, and on Friday, President Biden stated that a Russian attack on Ukraine was imminent.

Normally, markets tend to look past these geopolitical worries and focus mainly on the possible economic issues. Russia is one of the world’s largest oil producers and supplies almost 40 percent of the natural gas to Europe. Because of this, oil prices continue to remain high, with WTI closing at $91.66 for the week. On a positive note, if the talks between the U.S. and Iran are successful, it could lead to the U.S. lifting sanctions on Iran, which could cause oil prices to drop.

Retail sales jumped 3.8 percent for the month, beating the estimate of an increase of 2.1 percent, and much better than the 2.5 percent decline in December. Online shopping continued to do well, with non-store retailers gaining 14.5 percent. Other gains were seen in the home furnishing sector with an increase of 7.2 percent.

The omicron variant is still a concern, causing food and drinking establishment sales to drop 0.9 percent for the month. It appears the omicron variant is decreasing across the country, with lowering positivity rates and hospitalizations dropping. This should be good news for this sector in the coming spring and summer months.

This past Wednesday, the Fed released the minutes from the January FOMC meeting, which didn’t contain any surprises from what is already known. By now, everyone knows they will raise rates in March, but the question remains how significant the increase will be. The odds of a 50 basis point rate hike have dropped to 33 percent from over 90 percent. St. Louis Federal Reserve President James Bullard once again reiterated his position that the Fed needs to increase its policy rate by 1 percent by July 1.

Homebuyers are still facing increasingly higher home prices. Applications for new mortgages and refinancing dropped due to the rising mortgage rates. Those applying for a mortgage fell 1 percent compared to the previous week and 7 week lower than the same week last year. Application volume for refinancing was down 9 percent for the week and 54 percent lower than the same week last year.

Mortgage rates continued to increase and reached their highest level since before the pandemic started. The average rate on a 30-year mortgage rose to 4.03 percent from 3.85 percent a week ago.

Even though the demands for mortgages are falling, the size of the average loan application set a new record this week at $435,000 for an average loan. Higher mortgage rates might be dampening mortgage applications, but the demand for housing is still exceeding supply.