Stocks fall, oil soars as war on Ukraine rages
Prices top $100 per barrel in large single-day jump
NEW YORK – Oil prices soared and stocks fell on Wall Street Tuesday as investors shifted more money into ultrasafe U.S. government bonds in response to Russia’s escalating war on Ukraine.
Another day of volatile trading left stocks broadly lower as investors tried to measure how the conflict will impact the global economy. The S&P 500 index fell 1.5%. The Dow Jones Industrial Average fell 1.8%, and the Nasdaq composite slid 1.6%. The declines add to the market’s losses after a two-month skid for the S&P 500.
The bigger moves came from the markets for oil, agricultural commodities and government bonds. Oil has been a key concern because Russia is one of the world’s largest energy producers. The latest bump in prices increases pressure on persistently high inflation.
U.S. benchmark crude oil jumped 8% to $103.41 per barrel. That’s the biggest single-day jump since May 2020 and the highest price since 2014. Brent crude, the international standard, surged 7.1% to $104.97.
The crisis in Ukraine prompted an extraordinary meeting of the International Energy Agency’s board, which resulted in all 31 member countries agreeing to release 60 million barrels of oil from their strategic reserves.
Investors continued putting money into bonds, pushing yields lower. The yield on the 10-year Treasury fell sharply, sliding to 1.73% from 1.83% late Monday. It is now back to where it was in January. In February, it had crossed back above 2% for the first time in over two years. The 10-year Treasury yield is used to set interest rates on mortgages and many other kinds of loans.
The sharp pullback in bond yields weighed on banks. JPMorgan Chase fell 3.8%, and Bank of America slid 3.9%.
More than 70% of the stocks in the S&P 500 closed lower, with technology, industrials and communication companies among the biggest drags on the benchmark index. Only the energy sector notched a gain. Occidental Petroleum jumped 7%.
All told, the S&P 500 fell 67.68 points to 4,306.26. The Dow, which had been down 763 points, ended down 597.65 points to 33,294.95. The Nasdaq slid 218.94 points to 13,532.46.
The Russell 2000 index slid 39.58 points, or 1.9%, to 2,008.51.
Investors are closely monitoring developments in Ukraine while awaiting the latest updates from the Fed and U.S. government on the economy. Fed Chair Jerome Powell is to testify before Congress later this week and that could offer clues on the path ahead for raising interest rates.
Several stocks made big moves on earnings. Target jumped 9.8% for the biggest gain in the S&P 500 after reporting strong fourth-quarter financial results and saying it will invest up to $5 billion this year in physical stores, remodels and other initiatives. Workday rose 4.9% after reporting encouraging earnings.
Gold for April delivery rose $43.10 to $1,943.80 an ounce. Silver for May delivery rose $1.17 to $25.54 an ounce, and May copper rose 15 cents to $4.60 a pound. The dollar fell to 114.86 Japanese yen from 114.89 yen. The euro fell to $1.1123 from $1.1223.