U.S. stocks fell Tuesday as investors reacted to Russian President Vladimir Putin’s decision to order troops to breakaway regions of Ukraine, escalating tensions and raising fears of a full-scale invasion.
Markets in the U.S. were closed Monday in observance of the Presidents Day holiday, with trade on Tuesday providing the first opportunity for investors to react to developments in Eastern Europe.
How are stock-index futures performing?
The Dow Jones Industrial Average
fell 255 points, or 0.8%, to 33,824. The S&P 500
was down 13 points, or 0.3%, at 4,336. The Nasdaq Composite
shed 28 points, or 0.2%, to 13,520.
On Friday, the Dow, S&P 500 and Nasdaq Composite logged a second straight weekly decline. A so-called death cross crystallized in the Nasdaq, a bearish chart pattern.
What’s driving the market?
Putin ordered forces Monday into separatist regions of eastern Ukraine. The announcement raised fears, which have kept investors skittish, that an invasion was about to materialize.
The White House said President Joe Biden will issue an executive order that “will prohibit new investment, trade, and financing by U.S. persons’’ in those areas, and a further round of sanctions against Moscow were also expected.
Read: What a Russian invasion of Ukraine would mean for markets as Putin orders troops to separatist regions
Meanwhile, officials from the European Union referred to Putin’s latest moves, including the recognition of the independence of the Russian separatist Donetsk and Luhansk regions’ independence, as “a blatant violation of international law.” And Germany took steps to halt certification of the Nord Stream 2 pipeline that’s set to carry natural gas from Russia to Western Europe.
Need to Know: JPMorgan says Russia invasion isn’t the No. 1 stock-market threat
Geopolitical fears and the potential shakeout from a further escalation of tensions around Ukraine were being weighed against monetary policy considerations, with the U.S. Federal Reserve seen preparing to deliver a series of interest rate increases beginning next month.
“Most of the selloff in global equities this year can be attributed to the hawkish shift by the world’s major central banks,” Neil Shearing, Group Chief Economist, at Capitol Economics, wrote in a note to clients early Tuesday. “This suggests that there is still significant downside for global stock markets (and upside for safe havens, including US Treasurys) if the conflict escalates.”
See: Will Fed rate hikes crush the stock market? Here’s why speed matters
Markets have been unsettled at least partly due to concerns of a Russian annexation of Ukraine, which could lead to greater global tensions. Crude-oil futures and those for natural gas
have been mostly buoyed by invasion fears, with West Texas Intermediate crude
traded on the New York Mercantile Exchange, the U.S. benchmark contract, trading at a new seven year high early Tuesday.
Read more: Oil rises and natural gas surges 8% as Russia orders troops to Ukraine
Also: Gold rallies to highs not seen in more than a year as Russia’s Putin orders forces to breakaway regions in Ukraine
Which companies are in focus?
Home Depot Inc.
reported fiscal fourth-quarter profit and sales that rose above expectations and announced a 15% increase in its dividend. Shares of the home-improvement retail giant fell 5%. Shares of department-store retailer Macy’s Inc.
jumped 7.2% after the department store retailer reported fourth-quarter earnings that beat expectations and announced a dividend hike.
What are other assets doing?
The yield on the 10-year Treasury note
rose 2.3 basis points to 1.949%. Yields and debt prices move opposite each other. The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was down 0.1%. Bitcoin
rose 1.9% to around $37,760. Oil futures rose, with the U.S. benchmark
up 3%, while gold
was up 0.3% at just under $1,905 an ounce. The Stoxx Europe 600
was up 0.1%, while London’s FTSE 100
rose 0.4%. Equities fell sharply in Europe, with the Shanghai Composite
dropping 1%, the Hang Seng Index
falling 2.7% and Japan’s Nikkei 225
giving up 1.7%.