Crude oil futures hit their highest levels since 2014 on supply concerns as stocks sold off in a volatile session with investors eying how the US, EU and other nations will respond to Russia recognizing two breakaway regions in eastern Ukraine and sending in soldiers to support them.
The dollar was slightly lower against major currencies while gold also fell.
Stocks fell sharply and US Treasury yields rose after US President Biden announced sanctions against Russia for what he characterized as the beginning of an invasion of Ukraine, promising further, steeper punishments if Russia continued its aggression.
The EU also agreed on new sanctions against Russia while German Chancellor Olaf Scholz announced his country would stop the new Nordstream 2 gas pipeline. The UK announced action against Russian banks.
“The world is still hoping this is somewhat limited and doesn’t really spread across Europe and Ukraine,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, noting that riskier assets were selling off. “Nobody’s rushing to buy.”
Brent crude futures settled up 1.5% at $96.84 per barrel after earlier topping $99, the highest level since September 2014, reflecting fears that Russia’s energy exports could be disrupted. West Texas Intermediate (WTI) crude settled up 1.4% at $92.35 per barrel after earlier hitting $96, its highest level since August 2014.
The Dow Jones Industrial Average (DJI) fell 326.83 points, or 0.96%, to 33,752.35, while the S&P 500 (SPX) lost 19.19 points, or 0.44%, closing at 4,329.68. The Nasdaq Composite (IXIC) slid 48.01 points, or 0.35%, to 13,500.06.
The MSCI world equity index, which tracks shares in 50 countries, shed 0.51% after earlier falling 1.5%. Spot gold was last down 0.4%, after earlier climbing to $1,913.89, its highest level since June.
US Treasuries went on a roller-coaster ride, with an early rally driven by a bid for safe-haven assets reversing as investors took a more cautious approach to developments in Ukraine. The benchmark 10-year note fell 6/32 in price to yield 1.9494%, from 1.93% in the previous session. Yields move in the opposite direction to bond prices.
The dollar index fell 0.118%, with the euro up 0.22% to $1.13. The Japanese yen weakened 0.31% versus the greenback to 115 to the dollar, while the UK pound sterling last traded at $1.35, down 0.06% on the day.
Meanwhile, the Russian rouble slid to 80.92 to the US dollar in earlier trading, its lowest level against the greenback since November 2020, before reversing course and climbing up 1.8% against the dollar.
- Reuters, with additional editing by Neal McGrath
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