The stock market plunged on Thursday, with all three major indexes falling more than 2% after Russian troops invaded Ukraine, a move which caused oil prices to rise to over $100 per barrel while investors dumped stocks and fled to safe-haven assets.
The Dow Jones Industrial Average was down 2.2%, around 800 points, while the S&P 500 lost 2.1% and the tech-heavy Nasdaq Composite lost 2.6%.
The benchmark S&P 500 fell deeper into correction territory, almost 15% below its record high at the beginning of 2022, while the Nasdaq opened in bear market territory for the first time this year—now more than 20% below its record high last November.
Stock market futures took a nosedive overnight after Russian President Vladimir Putin ordered a “special military operation” in Ukraine, with several media outlets reporting explosions across Ukraine immediately after.
Ukrainian officials confirmed that Russia has launched a “full-scale attack from multiple directions,” and at least 40 Ukrainian soldiers and 10 civilians have been killed in the first hours of the Russian invasion.
Western leaders, which have already begun unleashing sanctions on Russia, widely condemned the invasion: U.S. President Joe Biden said in a statement that “the world will hold Russia accountable.”
Oil prices jumped in response to Russia’s attack on Ukraine, with Brent crude jumping above $100 per barrel for the first time since 2014 on Thursday.
“Investors are waking up to some hard truths this morning as Russia moved on Ukraine overnight… this is a sad day for humanity as millions of people are affected,” says Cliff Hodge, chief investment officer for Cornerstone Wealth. While markets should expect short-term volatility, rising oil prices are a “problem,” as they could add to “sticky inflation which may keep pressure on the Fed to stay on course,” he says.
What To Watch For:
With the Russian invasion of Ukraine adding more uncertainty to markets, the Federal Reserve will now likely only raise interest rates by 25 basis points (not 50 basis points) at its March meeting, according to Jamie Cox, managing partner for Harris Financial Group. “Investors with energy and commodity exposure should consider using this spike in prices to rebalance into heavily beaten down software names, particularly in the area of cybersecurity.”