The losses have intensified after news that Russia was closing in on the Ukrainian capital, Kiev. The capital had been hit by “horrible Russian rocket attacks”, Ukrainian Foreign Minister Dmytro Kuleba said. This came a day after US Secretary of State Antony Blinken told CBS that Kiev “could soon be under siege”.
Commodity prices remain in the red, with natural gas futures down 2.3% to $4.53. Oil was lower, with West Texas Intermediate, the US benchmark, trading at $92.59 a barrel, while Brent crude was at $98.81, after breaking above $100 on Thursday.
Government bond yields are trading mixed, with long-term debt down and shorter maturities rising. The benchmark 10-year Treasury bond has recently lost 1.96%, down 1.2 basis points in the session. A basis point is 0.01%. Yields move in the opposite direction to prices.
The market fell sharply yesterday following Moscow’s invasion of neighboring Ukraine early Thursday local time using ground, air and naval forces. The S&P 500 fell as much as 2.6% during the session, but closed up 1.5% despite the outbreak of violence.
The Dow Jones finished the day with a gain of about 90 points, after losing 859 points in its low of the session. The tech-heavy Nasdaq Composite rose 3.3% in a surprising rally after falling nearly 3.5% to the day’s lowest.
“Russia’s invasion of Ukraine has added to an already tense year, with investors selling first and asking questions later,” said LPL Financial chief market strategist Ryan Detrick. “But it’s important to know that the big geopolitical events of the past were often short-term market problems, especially if the economy was on solid footing.”.
President Joe Biden on Thursday afternoon launched a new wave of sanctions against Russia in a broad effort to isolate Moscow from the world economy. The White House has also authorized the deployment of additional troops to Germany as NATO allies seek to bolster defenses in Europe, Biden said.
Despite Thursday’s wild intraday reversal, the major averages are on track for their third consecutive negative week amid escalating geopolitical tensions and concerns over monetary policy. The Dow has lost 2.5% this week, its worst weekly result since January 21. The S&P 500 and the Nasdaq are down 1.5% and 0.6% this week, respectively.
All three indices remain in correction territory, meaning they are down 10% or more from their respective all-time highs. The Nasdaq opened Thursday’s session in bear market territory, down more than 20% from its all-time high in November.
“Although there may be some additional short-term volatility, these dislocation events historically present opportunities, provided a recession does not occur,” said Cliff Hodge, CIO of Cornerstone Wealth. “Rising energy prices will also support sticky inflation which may keep pressure on the Fed to stay the course.”
Shares of Beyond Meat slumped more than 10% in pre-opening after the alternative meat maker reported a larger-than-expected loss and declining revenue in its fourth quarter.
Cryptocurrencies rise this Friday after yesterday’s strong sell-off that saw some $150 billion removed from the market after Russia invaded Ukraine. Bitcoin is trading up 7.47% at $38,438.70. The world’s largest cryptocurrency has surged past $39,000 in the past 24 hours despite falling to $34,338.57 on Thursday triggered by the Russian invasion of Ukraine that also saw global stocks fall sharply.
