Stocks bounce, oil pares gains as markets digest Russia attack
BNN Bloomberg
U.S. stocks pared back some losses from the depths of a selloff Thursday while bonds and oil soared as Russian President Vladimir Putin’s invasion of Ukraine cast a pall over global markets.
U.S. stocks pared back some losses from the depths of a selloff Thursday while bonds and oil soared as Russian President Vladimir Putin’s invasion of Ukraine cast a pall over global markets.
The S&P 500 slid 0.8 per cent, the Dow Jones Industrial Average was 1.6 per cent lower in correction territory, and the tech-heavy Nasdaq 100 erased its declines as the Group of Seven leaders said it was closely monitoring the situation and was ready to act on potential oil and gas disruptions. The Stoxx 600 index shed 3.1 per cent and Russian shares slumped the most on record.
Putin said Russia doesn’t plan to “occupy” its neighbor after military forces entered the country, accompanied by missile and artillery fire, but that action was necessary after the U.S. and its allies crossed Russia’s “red line” by expanding the NATO alliance. The European Union, U.S. and U.K. have promised harsher sanctions on the Russia’s economy and financial sector. Meanwhile, the government in Kyiv declared martial law and called on citizens to take up arms.
“The invasion is a worse scenario than some investors anticipated,” said Keith Lerner, chief market strategist at Truist Advisory Services. “That’s why we are seeing the negative reaction.”
Crude and European natural gas surged on possible risks to Russian energy exports, with Brent futures trading as high as US$105 a barrel and benchmark West Texas Intermediate crossing US$100 earlier in the session.
The flight to safety saw the U.S. 10-year Treasury yield tumble to 1.95 per cent. Meanwhile, the CBOE Volatility Index, or so-called fear gauge, marched higher, and gold hit the highest since September 2020 before paring back an advance.
