U.S. stocks faced another volatile session amid worries about the potential for conflict abroad and Federal Reserve missteps at home. The S&P 500 pared losses while still heading for a third straight drop as Ukrainian leader Volodymyr Zelenskiy briefly spooked markets with a colorful comment. But there was some good news on the inflation front, as American consumers said they don’t expect red-hot levels to last for too long. New York Fed economists concluded they seem to recognize the unusual nature of the current bout of high inflation. Here’s your markets wrap. —Natasha Solo-Lyons

Bloomberg is tracking the coronavirus pandemic and the progress of global vaccination efforts.

Risks for stocks are piling up as central banks grow increasingly hawkish and worries of war in Europe spur fears of an exacerbated inflationary spiral. Equity markets have reeled on signs that central banks might tighten policy far more aggressively than previously expected. 

Russian leaders raised the possibility of more diplomacy as German Chancellor Olaf Scholz, who held talks in Kyiv Monday, is due to fly to Moscow for a meeting with Vladimir Putin Tuesday. The U.S. and other NATO nations have promised sweeping sanctions if Putin further invades Ukraine, something his government has pledged not to do. The U.S. has said its intelligence indicates Russia may attack imminently. Here’s the latest on the crisis.

Goldman Sachs’s former Southeast Asia chairman, Tim Leissner, is to speak publicly for the first time almost four years after pleading guilty for his role in the 1MDB scandal. Leissner is expected to be the star witness in the U.S. case against his former subordinate, Roger Ng, the only Goldman banker to go on trial for the multibillion-dollar bribery scheme.

Tim Leissner Photographer: Rodin Eckenroth/Getty Images North America

Economies could be pushed into recession if Russia attacks Ukraine, posing another significant risk for equity markets, according to one of Wall Street’s most vocal bears. A war “materially increases the odds of a polar vortex for the economy and earnings,” Morgan Stanley’s chief U.S. equity strategist Michael Wilson wrote in a note to clients.

Canada’s largest province will drop many of its Covid-19 measures next month. Prime Minister Justin Trudeau invoked emergency powers as protesters against vaccine rules continue to block streets in Ottawa. Police seized weapons at a border crossing in Alberta and counter-protests grew. In Asia, Hong Kong’s daily coronavirus cases topped 2,000 for the first time, with health officials warning of a “crisis” of rising positive cases. Here’s the latest on the pandemic.

America’s largest airlines have been working with the Biden administration for months on creating a nationwide no-fly list that would ban from commercial carriers the worst unruly passengers.

HSBC plans to as much as double bonuses for some of its junior bankers and traders in a bid to catch up with rivals on compensation. The lender paid less than most rivals a year ago after cutting the bonus pool at its global banking and markets division by 15%.

• Goldman Sachs sees a big change coming to the bond market.
• Bloomberg Opinion: Dangers of a “Pulp Fiction” moment in Ukraine.
• Shale king Hamm passes billions of dollars to his heirs—tax-free.
• Indonesia eyes lifting all quarantine requirements in April.
• Memory of deadly freeze looms large in Texas oil-regulator election.
• The U.K. makes its first-ever NFT seizure in crackdown on tax fraud.
• Super Bowl ad blitz tells Americans: Stop worrying and just buy crypto.

The omicron wave of Covid-19 has put less of a dent in U.S. employment growth than most forecasters expected, but it has kept a lot of workers home. In fact, a survey of one week last month by the the Bureau of Labor Statistics showed the highest percentage out sick since it started keeping track in 1976.

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