4.10pm: S&P 500 loses 10% since Jan
US equities closed with a sharp decline Tuesday amid the Russia-Ukraine standoff, intensified by US President Joe Biden’s latest sanctions against Moscow.
At closing, the Dow Jones Industrial Average lost more than 400 points or 1.4% at 33,596, while the S&P 500 was down by 1% at 4,304, and Nasdaq Composite shed 1.2% at 13,381.
The S&P 500 extended losses more than 10% since its last high in January following the sanctions.
Biden’s sanctions on the Russian bank and its military bank come a day after Russian President Vladamir Putin invaded two breakaway regions in Ukraine.
The geopolitical tensions may lead to supply chain issues, furthering inflationary pressures as the Feds prepare to raise interest rates as early as March.
On the corporate front, Macy’s lost more than 5% despite upbeat quarterly earnings.
12.05pm: Dow loses 300 points
US benchmarks declined midday on Tuesday after a brief recovery amid the Ukraine-Russia rift, as investors eyed next moves from the Kremlin following European sanctions on Moscow.
At noon, the Dow Jones Industrial Average lost more than 300 points, or 1% at 33,748, while the S&P 500 and the Nasdaq Composite lost 0.7% and 0.9%, respectively.
Commenting on the intraday gains within an hour of opening, Chris Beauchamp, chief market analyst at online trading platform IG, said, “Such swift bounces are a feature of declining markets, and with further developments in the crisis inevitable, the likelihood is that a headline will come along sooner or later and prompt another leg lower.”
He noted that oversold stock markets have found some relief in the short term, but prevailing risk-off sentiment should gain the upper hand soon once the next development in the Russia-Ukraine crisis arrives.
Investors are concerned that the potential war between Russia and Ukraine could further spike disruption in the supply chain, all when inflationary pressures are already building up on the Fed to tighten monitor policy.
The biggest loser on the Dow was Home Depot, with its shares plunging 8.7% after the company posted weak sales growth in its quarterly earnings.
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Vicinity Motor wins US$12M order for 100 VMC 1200 electric trucks
Else Nutrition concludes successful preclinical study on plant-based infant formula
10.02am: Markets falter amid Russia-Ukraine standoff
US stocks wavered on Tuesday after Russian President Vladimir Putin sent troops to two breakaway areas of Ukraine.
In New York, the Dow Jones Industrial Average shed 0.7% or 250 points at 33,829, while the broader S&P 500 and the Nasdaq Composite dipped 0.2% and 0.3%, respectively.
“Russia still claims to desire a diplomatic solution to the crisis in Ukraine, despite being the catalyst for the latest escalation when recognizing the independence of two separatist regions,” noted Craig Erlam, senior market analyst, UK & EMEA, OANDA. “That decision has invited a barrage of criticism and sanctions will follow today which will no doubt damage diplomatic efforts that appeared to be making headway earlier this week.”
As the crisis deepens though, “we will continue to see risks being priced in accordingly, and nowhere is that more evident than in Russian assets and the oil and gas markets,” Erlam noted. "The move by Germany to halt certification of Nord Stream 2 following the events of the last 24 hours is not entirely surprising but does block what would have otherwise been one passage to alleviating pressures in the gas market in the coming months."
On the corporate front, Macy’s reported a better-than-expected holiday quarter, sending its shares soaring by 9.3% on Tuesday.
Meanwhile, investors are gauging the Federal Reserve rate hike in the upcoming March15-16 meeting, with expectations of at least a 0.25% point move– continuing to put pressure on the volatile markets.
6.30am: US stocks seen opening down
US stocks are expected to open sharply weaker from the Presidents Day holiday after Russia ordered troops into two breakaway regions of eastern Ukraine, defying threats of sanctions from the West. Safe-haven gold rose to its highest in more than eight months, while Brent Crude Oil (LSE:BRENT) traded above $98 a barrel, adding to inflation concerns.
Futures for the Dow Jones Industrial Average declined 0.23% in Tuesday pre-market trading, while those for the broader S&P 500 index fell 0.92% and the tech-heavy Nasdaq shed 1.77%.
Markets ended last week in the red as Ukraine-Russia tensions escalated and as investors continued to assess the Federal Reserve's upcoming decision on interest rate hikes amid geopolitical uncertainty.
At the close on Friday, the Dow was 0.68% lower at 34,079, while the S&P 500 shed 0.72% to 4,349 and the Nasdaq declined 1.23% to 13,548.
“Not only have Putin’s actions increased the risk of the biggest war since 1945 but they have also exacerbated the inflationary problem by pushing energy prices higher, exacerbating one of the market’s biggest worries this year,” commented Victoria Scholar, head of investment at interactive investor.
“The intensifying crisis between Russia and Ukraine has raised concerns about the supply disruptions that would ensue as sanctions look set to cripple Russia, the world’s second-largest oil exporter and the world’s top natural gas producer.”
If Putin continues his aggression and the threat of war becomes a reality, Scholar said oil prices could easily push beyond $100 towards $120 a barrel to fresh highs not seen since 2014.
Scholar added: “Amid the global market sell-off investors are flocking towards safety assets to hide from the storm with gold catching a bid while the Japanese yen is also in demand. Gold has broken above key resistance turned support at $1900 towards levels not seen since January 2021.”