Ukraine is concerned about causing US stocks to lose strong points
Wall Street and European stocks fell on Thursday as the US said Russia was on track to invade Ukraine within the next few days.
The tech-heavy Nasdaq Composite faced the brunt of losses, slipping 2.9%, while the blue-chip S&P 500 closed down 2.1%. This year’s bear market has wiped more than $3 billion off the value of US stocks, with the S&P 500 falling more than 8%.
Linda Thomas-Greenfield, US Ambassador to the UN, said in a tweet that “evidence is in fact Russia is moving towards an imminent invasion”.
Speaking at the White House late on Thursday, US President Joe Biden speak There is a “very high risk” of a Russian invasion, adding that he believes Moscow has engaged in “a false flag operation as an excuse to infiltrate”.
Selling in the US was widespread, with 85% of stocks in the S&P 500 falling. Thursday’s slide ranks among the five worst trading days of the past year for the benchmark index.
Market measures of volatility also spiked. Cboe’s Vix Volatility Index, known as Wall Street’s fear gauge, rose to 28.1, well above its long-term average.
“The [stock] Hani Redha, global multi-asset director at PineBridge Investments, said the market has been under a lot of pressure, with geopolitical tensions growing. “It’s been raining and now it’s pouring.”
Russia’s Moex share index fell 3.7%, while the ruble lost 1.6% against the dollar. Elsewhere in Europe, the region-wide Stoxx 600 index closed 0.7% lower and London’s FTSE 100 fell 0.9%.
Financial markets have surged over the past week as developments in Ukraine and the growing threat of tighter monetary policy to reduce inflation weigh on investors.
Oil has been volatile this week as investors speculated about Western sanctions on Russia and their effect on fuel supplies. Brent crude, the international standard, settled at $92.97 a barrel, down 1.9% from the previous day.
“I think the situation in Ukraine scared a lot of people and got a flight to safety. . . We don’t know what the sanctions will be like, but there will be an impact on energy,” said Michael Loukas, chief executive officer of TrueMark Investments.
Market uncertainty spurred investors to seek haven assets such as government debt and gold.
The yield on the 10-year US Treasury note, inversely proportional to its price, fell 0.08 percentage points to 1.96 percent, while the yield on the equivalent German bond fell 0.04 points. percent down to 0.23 percent.
Gold hit nearly $1,900 an ounce, up 1.5%.
Money markets have priced in the Federal Reserve’s six-quarter rate hike this year after US inflation surged to a four-decade high in January.
Minutes of the Fed’s policy meeting on Wednesday highlighted officials’ determination to stubbornly resisting high pricesalthough some have warned of the risks posed to markets and the broader economy by tightening policy too quickly.
In Asia, Japan’s Topix fell 0.8%. Hong Kong’s Hang Seng slashed its losses from the start of the day to close 0.3% higher.
Additional reporting by Hudson Lockett
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