'We Remain Open To Negotiations': Did Kremlin Comments Trigger Market Reversal Thursday After Hot CPI Data Sparked Steep Selloff?

Many were surprised to see the markets turn positive on Thursday after the Labor Department reported an 8.2% year-over-year increase in the consumer price index for September, which sent the SPDR S&P 500 SPY tumbling lower in premarket trading. But Thursday's hot CPI data may not be the only thing moving markets. 

What To Know: According to a Reuters report, Russia's military operation goals in Ukraine could be achieved through negotiations.

Kremlin spokesman Dmitry Peskov reportedly told Russian newspaper Izvestia that Russia is open to talks with Ukraine. 

"The direction has not changed, the special military operation continues, it continues in order for us to achieve our goals. However, we have repeatedly reiterated that we remain open to negotiations to achieve our objectives," Peskov said. 

The Kremlin spokesman said he does not see potential for talks with the West anytime soon due to its "hostile" attitude towards Russia.

"It takes two sides to have a dialogue. As the West is now taking a very, very hostile stance towards us, it's unlikely that there will be any such prospect in the near future," Peskov reportedly said.

Why It Matters: The broader markets plunged Thursday morning before reversing shortly after the negotiation talks surfaced. 

Peskov's comments to the Russian newspaper come in the wake of several statements this week suggesting Moscow is open to talks, but it appears the markets may be beginning to take the possibility of peace negotiations seriously.

See Also: Biden Will Speak To Putin At G20 Meeting But Only To Discuss Brittney Griner, Not Ukraine War

Runaway inflation data has plagued markets for most of 2022 and the Russia-Ukraine war has played a big role in market weakness. Russia's invasion of Ukraine has created large energy supply disruptions and added to inflation concerns. 

Thursday's headline CPI rose 8.2% in September, coming in above average economist estimates of 8.1%. The number all but assures the Fed will continue to be aggressive in its fight against inflation. 

According to FOMC minutes from the Fed's September meeting, Fed officials were surprised at the pace of inflation last month. The central bank indicated that it expects to keep higher interest rates in place until prices start to fall.

"Participants judged that the Committee needed to move to, and then maintain, a more restrictive policy stance in order to meet the Committee’s legislative mandate to promote maximum employment and price stability," the minutes stated.

SPY Price Action: The SPDR S&P 500 traded down below $350 Thursday morning before staging a reversal.

The SPY closed Thursday up 2.61% at $365.88, according to Benzinga Pro.

Photo: bryan from Flickr.