The stock market is expected to remain volatile in the upcoming week due to the ongoing conflict in Ukraine and a significant inflation report.

• In the week ahead, the markets will be dominated by Russia's invasion of Ukraine and its impact on oil and other commodities due to supply concerns.
• The release of the consumer price index for February on Thursday is anticipated to reveal a further sharp increase in inflation.
• Investors will closely monitor the Federal Reserve, but Fed officials will not make any public statements during their quiet period leading up to their March 15-16 meeting.

The ongoing invasion of Ukraine by Russia will remain a significant concern for investors as they monitor new inflation figures and rising oil prices in the upcoming week.

In the past week, volatile trading caused stocks to sell off, with oil rising more than 20% and other commodities increasing due to supply concerns. As a result, investors sought safety in bonds, causing prices to rise and the yield to 1.72% on Friday. Additionally, the dollar strengthened, causing the euro to fall 2% on the week.

Jim Caron, head of macro strategies for global fixed income at Morgan Stanley Investment Management, stated that the upcoming weekend is uncertain due to the increasing aggression of the Russians.

If there is no action over the weekend or if peace talks occur, the 10-year note yield could increase by 10 to 15 basis points, according to Caron. Yields move in the opposite direction of price (1 basis point equals 0.01%).

As investors anticipate the Federal Reserve's interest rate hike on March 16, Fed officials will refrain from making public statements during the quiet period before their meeting.

In the upcoming week, the economic calendar will have a light schedule, except for Thursday's release of the February consumer price index report.

Economists predict that headline inflation, which encompasses food and energy costs, will increase to 7.8% year-over-year from 7.5% in January, as reported by Dow Jones, marking the highest rate since 1982.

Marc Chandler, chief market strategist at Bannockburn Global Forex, stated that the risk is on the positive side and it would be surprising if we receive an 8% return.

The market's trading will also be a focus for investors, as the fell 1.3% to 4,328 and the lost 2.8% to 13,313 in the past week.

Paul Hickey, co-founder of Bespoke, stated that the major averages are in a downtrend and appear to rally before losing momentum. Until there is a break in this trend, it is advisable to exercise caution. This situation is concerning, according to Hickey.

As other conflicts have shown, the market is behaving similarly, according to Hickey.

Hickey stated, "In the short term, there is a lot of uncertainty. I believe the playbook is similar, with a lot of sloshing around - big swings up and down - before things eventually stabilize a few months later. The question is, where does this one go?"

Boiling oil

On Friday, oil surged, reaching $115 for the first time since 2008, after a week of gains. WTI increased by 7.4% and 26% for the week, settling at $115.68. The conflict over control of Europe's largest nuclear power plant in Russia early Friday caused unease among investors.

The Russian invasion of Ukraine has caused an increase in fear of inflation, and economists are predicting higher inflation rates due to the rise in oil prices. As a major producer of wheat, palladium, aluminum, and other commodities, Russia's actions have caused the commodities complex to shift higher.

One of the biggest hits to inflation can be caused by a sudden increase in oil prices.

Russia stands out as a commodity exporter, significantly affecting various markets. It is among the world's largest exporters of crude and natural gas, with Europe being its primary customer. Additionally, Russia is the largest exporter of palladium and wheat.

Gasoline prices have increased by 26 cents in a week and 11 cents in just one day due to the jump in oil, which is already affecting U.S. consumers at the pump.

John Kilduff, a partner with Again Capital, stated that the national average could reach $4 per gallon next week.

As we continue to price in the loss of Russian crude oil, there's still room to grind higher in the oil market, Kilduff said on Friday.

The Russian financial system's sanctions did not affect the U.S. and its allies, but they did deter buyers, banks, and shippers from engaging in transactions with Russia.

Kilduff stated that it was evident nobody desired to be short heading into the weekend. Despite this, there is still potential for further gains as we incorporate the impact of the loss of Russian crude oil into our pricing strategy.

Analysts predict that even if Iran is able to sell its oil on the market in exchange for an end to its nuclear programs, there will still be a shortfall of 1 million barrels. Oil traders are closely monitoring the situation.

Week ahead calendar

Monday

Earnings: Ciena, ThredUp

3:00 p.m. Consumer credit

Tuesday

Earnings: Bumble, Casey’s General Stores, Stitch Fix,

6:30 a.m. NFIB small business survey

8:30 a.m. International trade

10:00 a.m. Wholesale trade

Wednesday

Marqeta, Asana, Oatly, United Natural Foods, Adidas, Earnings.

10:00 a.m. JOLTS

Thursday

Earnings: J , American Outdoor Brands, Wheels Up Experience,

7:45 a.m. European Central Bank policy decision

8:30 a.m. Initial jobless claims

8:30 a.m. Consumer price index

2:00 p.m. Federal budget

Friday

10:00 a.m. Consumer sentiment

10:00 a.m. QSS