4.05pm: Markets recover losses
US equities closed in the green Thursday, recovering losses from earlier in the day, as investors closely weighed fresh sanctions against Russia for brutally invading Ukraine.
The Dow Jones Industrial Average ended with gains of 92 points or 0.3% at 33,223, while the S&P 500 was up by 1.5% at 4,288, as well as the Nasdaq Composite with a sharp rise of 3.3% at 13,473.
Among the stocks bought in the dip were Amazon, Netflix, Alphabet, and Microsoft– sending the Nasdaq soaring.
Shares of Microsoft were up by 3%, while Netflix gained 5% on Thursday.
US President Joe Biden announced stricter sanctions against Moscow, barring the country from global economic activities.
12.02pm: Nasdaq recovers
US equities were mixed midday as the Nasdaq Composite clawed back amid the Russian attack on Ukraine, while investors await more sanctions from the West against Moscow.
At noon, the Dow Jones Industrial Average lost over 542 points, or 1.6% at 32,589, and the S&P 500 was down by 0.7%, while the Nasdaq Composite gained 0.2%.
“While it had been expected, the actual Russian move into Ukraine has provoked another bout of selling across markets,” said Chris Beauchamp, chief market analyst at online trading platform IG. “Apart from an impressive intraday recovery in the Nasdaq, most indices are firmly in the red, and are likely to stay that way.”
Beauchamp noted that a full package of Western sanctions has yet to be announced, “and we should see this risk-off atmosphere persist for the time being.”
Russian goals are still unclear, but a total takeover of Ukraine cannot be ruled out. “What happens after that is much harder to define, but the standoff between Putin and NATO is certainly a long-term fixture,” Beauchamp said.
The invasion further destabilized the global economy, which was already suffering from the decades-high inflation caused by the unprecedented coronavirus pandemic.
“The strength in gold and oil is certainly not going away, both being bolstered by the intensifying conflict in eastern Europe,” said Beauchamp. “This continues to drive an expectation of further inflation, but already some central bankers are beginning to wonder whether the full spectrum of policy tightening is appropriate in these changed circumstances.”
10.00am: Dow loses 700 points
US stocks declined sharply at the open on Thursday as Russia carried out airstrikes on Kyiv and invaded Ukraine overnight, leading to a spike in global energy prices and spiking market volatility.
In early trading, the Dow Jones Industrial Average plunged by over 700 points, or 2.23% at 32,391, while the tech-heavy Nasdaq Composite lost 1.7%. The S&P 500 continued deeper into correction territory Thursday, losing another 1.8%.
“The negative baton is being passed from market to market globally, with another weak opening in the US now leaving the Dow Jones down by 11% in the year to date, the S&P500 by 13.4% and the Nasdaq by 19%,” commented Richard Hunter, head of markets at Interactive Investor.
The global oil price, up 35% in the year to date, is now at $105 per barrel, passing the $100-mark for the first time since 2014. Natural gas prices were up by 5%.
As the broad markets sell-off sped up, some of the most hit companies were Apple and JP Morgan Chase, losing 4% and over 4.5%, respectively, while Tesla lost 2% on Thursday.
VanEck Russia ETF, a US-traded security that invests in Russian companies was down by more than 22%.
“If there is a glimmer of hope among the volatility which has become a feature of this year even without the latest developments, it is that there will have been certain sectors caught in this crossfire which will have simply been oversold,” said Hunter.
He added that such businesses, whose fundamentals will not have changed overnight, will potentially lead the charge as and when sentiment improves.
“For the moment, however, matters need to stabilize at a macro level before any sort of market recovery can be entertained,” he said. “It is impossible to call the bottom in markets such as these and difficult to anticipate positive catalysts, but turmoil such as this can provide buying opportunities.”
6.30am: US stocks seen falling sharply at the open
US stocks are expected to sharply lower after President Vladimir Putin ordered the start of military operations in eastern Ukraine and Russian forces commenced a multi-pronged attack on a number of cities in its neighbouring country.
Futures for the Dow Jones Industrial Average sank 2.5% in Thursday pre-market trading, while those for the broader S&P 500 index fell 2.53% and the tech-heavy Nasdaq shed 3.15%.
Safe-haven gold gained more than 3% to its highest level in over a year while Brent Crude Oil (LSE:BRENT) rose above $100 for the first time since 2014 as energy prices surged on the offensive by Russia, one of the largest exporters of oil and gas.
US markets also ended Wednesday with sharp losses as the S&P 500 plunged deeper into the correction territory amid fears of the Ukraine-Russia war.
At the close, the S&P 500 lost 1.84% to 4,226, while the Nasdaq suffered heavy losses of 2.57% to 13,037. The Dow Jones declined by 1.38% to 33,132.
“It’s panic in the markets,” commented Ipek Ozkardeskaya, senior analyst at Swissquote. “The combined revenue exposure of the S&P500 to Russia and Ukraine is only about 1%. It’s not much. Yet the rising energy and commodity prices are a growing threat for US equities as they will put further upside pressure on inflation and force the Federal Reserve’s hand to act more aggressively to tame the inflation," she added.
Ozkardeskaya questioned whether the Fed could go "full blast" into an aggressive policy normalization while a war is taking a severe toll on global growth and economic recovery.
"Not so sure," she said. "It will sure give (Fed chair) Jerome Powell the best excuse to hold fire and soften the market expectations."