Feb. 22 (UPI) — U.S. markets fell Tuesday as U.S. President Joe Biden imposed sanctions on Russia as tensions with Ukraine ratcheted up.
The S&P 500 dropped 1.01% to close in correction territory, while the Nasdaq Composite slid 1.23%. The blue-chip Dow Jones Industrial Average closed down 482.57 points, or 1.42%, after having lost more than 700 points earlier in the day.
Markets dove as Biden announced a series of punitive sanctions aimed at Russian banks and individuals as he said Russian President Vladimir Putin’s recognition of two breakaway regions of eastern Ukraine as independent countries and his decision to send in Russian troops as “peacekeepers” on Monday amounted to an “invasion” of Ukraine.
VanEck Russia ETF, a U.S.-traded security that invests in major Russian companies declined 8.9% on Tuesday.
“The stock market is right to be concerned about current tensions between Russia and Ukraine, which run the risk of exacerbating the challenging inflation backdrop that many investors and companies have expected to improve in the back half of 2022,” RBC Capital Market’s Lori Calvasina wrote in a note.
“The bad news is that the investment community still appears to be in the early days of understanding the potential implications of this conflict.”
Biden also said Tuesday that he was working with Germany on halting the Nord Stream 2 pipeline, sending European natural gas futures up 11% while West Texas Intermediate crude rose 1.5% to $92.27 per barrel.
Markets, which were closed on Monday for President’s Day, have been on the decline in the past week as investors fret over the Federal Reserve’s plans to hike interest rates.
“While Monday’s episode will have important implications for Russia’s political relations with foreign partners, a significant market event is likely to be avoided for the time being, but the trajectory in the coming weeks will be important to monitor from a rising market risk perspective,” Ed Mills of Raymond James said, according to CNBC.
Tuesday also saw another round of quarterly earnings as Home Depot stock fell 8.78% and shares of Macy’s dropped 4.94% despite both posting better than expected earnings data.
