U.S.markets sank again Wednesday, as uncertainty over the conflict in Ukraine continues to plague investors, sending the Dow Jones industrial average plunging near correction territory, a day after the S&P 500 reached the same grim milestone.Get the full experience.Choose your plan ArrowRight
The Dow dropped 465 points, or 1.4 percent, after Ukraine announced plans for a 30-day state of emergency as it prepares for an invasion and urged its citizens to leave Russia.It ended the day at 33,131.75.The S&P 500 dropped 79 points to 4,225.50, about 1.8 percent, after ending Tuesday’s session in correction — a 10 percent drop from an index’s most recent high — for the first time since the pandemic’s earliest days.
The tech-heavy Nasdaq, which entered a correction in January, shed 344 points, or 2.6 percent, to end at 13,037.49.On Tuesday, stocks sold off sharply after Russian President Vladimir Putin recognized the independence of two Moscow-backed separatist regions in eastern Ukraine and ordered Russian forces onto their territories for “peacekeeping” purposes.The White House characterized Russia’s actions as “the beginning of an invasion” and announced economic sanctions targeting some financial institutions, Russian sovereign debt, and Russian elites and their family members.The European Union, Britain, Australia, Canada and Japan also introduced or teed up sanctions against Russia Tuesday.Russia has warned that Americans will fully feel the “consequences” of U.S.sanctions, and the West is bracing for retaliation, which Moscow said would hurt global financial and energy markets.Biden has acknowledged that the crisis could lead to higher gasoline prices, while U.S.
businesses have been warned to prepare for possible cyberattacks.More sanctions will follow if Russia invades Ukraine, Biden has pledged.That creates more head winds for consumers, according to Larry Adam, chief investment officer for Raymond James, who notes that the U.S.average for a gallon of gasoline has jumped nearly a dollar, to $3.53, in the past year.“On an annualized basis, that translates to an almost $180 billion deduction in discretionary consumer spending,” he said in commentary emailed Wednesday to The Post.“If gasoline prices were to rise to the psychological $4 [per] gallon, it would likely further pressure consumer spending and place downside risk on our economic forecasts.”Geopolitical tensions are normally shrugged off by investors, but the crisis in Ukraine has been dominating daily market machinations because of Russia’s central role in global energy markets.Russia produces about 10 percent of the world’s oil supply, on par with the United States and Saudi Arabia, and surging energy costs will ripple quickly through the global economy, exacerbating already high inflation.Lauren Goodwin, director of portfolio strategy at New York Life Investments, said major external events such as the crisis in Ukraine tend to “reinforce preexisting trends” more than they change the tenor of the market.
But if Russia goes deeper into Ukraine, Goodwin noted Wednesday in an email, “the conflict could be longer and the West’s reaction could be more severe.”“As a result, sanctions could be more biting, with likely consequences for Russia’s political and economic system as well as for ex-Russian companies required to navigate those sanctions,” Goodwin said.
“Higher commodity prices and slower growth could have a meaningful impact on the global economy, including emerging market economies and by making the Fed’s job even more difficult.”European and Japanese officials have expressed concerns about Moscow restricting energy and chipmaking supplies.On Tuesday, German Chancellor Olaf Scholz announced that Berlin would halt the regulatory approval process for Nord Stream 2, a controversial gas pipeline project between Germany and Russia, in response to Moscow’s escalation in Ukraine.The move was applauded by the United Nations and NATO allies and cited as part of a united response to Russia, but a senior Russian official warned Tuesday that Germany would “very soon” be paying more than double for natural gas.Overseas, markets were mixed.Asian indexes closed higher across the board, led by the Shanghai Composite index, which gained more than 0.9 percent.
(Japan’s Nikkei 225 was closed for a holiday.) European indexes closed down in the negative except for Britain’s FTSE 100, which was barely positive.The benchmark Stoxx 600 index shed nearly 0.3 percent.Oil prices wavered, having come down slightly from recent highs.Brent crude, the international oil benchmark, was nearly flat at roughly $97 a barrel.West Texas Intermediate crude, the U.S.
oil benchmark, inched up 0.3 percent to $92.24.The crisis had recently pushed prices within striking distance of $100 per barrel, and analysts believe such prices are likely to return if tensions escalate further.Gold — a major Russian export — has been pushed to multiyear highs as investors flocked to safer ground.Prices moved 0.17 percent higher on Wednesday, to trade around $1,910.60 per troy ounce.Eli Rosenberg contributed to this report..
