By Karen Langley and Caitlin Ostroff 

U.S. stocks posted weekly losses Friday as the threat of an invasion of Ukraine and uncertain path of monetary policy weighed on market sentiment.

Investors tracked headlines on the Ukraine situation throughout the week. U.S. officials warned they expect a Russian attack on Ukraine in the next few days and said prospects for averting war appear dim.

Conflict could inject fresh volatility into markets, with the heightening of geopolitical uncertainty prompting some traders to sell first and ask questions later.

"It could create a more risk off environment where investors just want to move out of riskier assets into safer assets," said Michael Sheldon, chief investment officer at investment advisory firm RDM Financial Group.

The $S&P 500 index(.SPX.US)$ fell 1.6% for the week, bringing its losses this year to 8.8%. The $Dow Jones Industrial Average(.DJI.US)$ lost 1.9% for the week, while the tech-heavy $Nasdaq Composite Index(.IXIC.US)$ retreated 1.8%.

War between Ukraine and Russia could prolong elevated inflation in developed economies by disrupting supplies of important commodities, said Hani Redha, a portfolio manager at PineBridge Investments. Russia is among the world's largest suppliers of oil, as well as the biggest exporter of wheat and a major producer of metals such as palladium, aluminum and nickel.

"Inflation is really the big question that will determine how markets play out, and that only adds to the delay in resolving the inflation situation," Mr. Redha said. He expects markets will remain volatile as investors try to assess how central banks will respond to elevated prices and the direction of the Ukraine conflict.

Federal Reserve officials at their January meeting discussed an accelerated timetable for raising interest rates amid concerns with high inflation, according to meeting minutes released Wednesday. The discussion showed central bank officials were prepared to raise rates at consecutive policy meetings, potentially setting up a series of rate increases in March, May and June.

Investors have been forced to confront a slew of conflicting signals, said Victoria Fernandez, chief market strategist at Crossmark Global Investments. There are the challenges of geopolitical tensions, high inflation and questions about the future of monetary policy. On the other hand, Ms. Fernandez said that corporate earnings have been decent and she expects inflation could peak in the first half of the year.

"It just kind of depends on the day and the economic numbers that are coming out which side is winning this tug of war," she said.

On Friday, the S&P 500 fell 31.39 points, or 0.7%, to 4348.87. The Dow Jones Industrial Average dropped 232.85 points, or 0.7%, to 34079.18. The Nasdaq Composite declined 168.65 points, or 1.2%, to 13548.07.

The stock-market declines Friday were broad-based, with 10 of the 11 sectors of the S&P 500 pulling back. The technology sector was the worst performer, dropping 1.1%. The consumer staples segment bucked the trend by rising 0.1% for the day.

Among individual stocks, $Shake Shack(SHAK.US)$ shares fell $3.11, or 4.1%, to $72.07 after the burger chain guided for weaker-than-expected revenue this quarter. $Roku Inc(ROKU.US)$ shares tumbled $32.25, or 22%, to $112.46 after the company said supply-chain disruptions continued to affect its growth and TV sales.

Shares of $DraftKings(DKNG.US)$ dropped $4.77, or 22%, to $17.29 after the sports-betting company said it expects its adjusted loss to widen this year as it launches in states like New York and Louisiana.

In bond markets, the yield on the benchmark 10-year U.S. Treasury note dropped to 1.930% Friday from 1.972% Thursday. Yields fall as bond prices rise.

Brent crude, the international oil benchmark, rose 0.6% Friday to $93.54 per barrel.

Overseas, the pan-continental Stoxx Europe 600 fell 0.8% Friday. Major indexes in Asia closed with mixed performance. China's Shanghai Composite rose 0.7%, while Japan's Nikkei 225 declined 0.4%. Hong Kong's Hang Seng shed 1.9%, with declines led by Meituan, which fell 15% after China said the country's food-delivery platforms should reduce the fees they charge merchants.