Topline
Markets plunged yet again on Thursday as top federal officials warned that tensions between Russia and Ukraine had reached a “crucial moment” with an invasion likely “imminent,” leading nervous investors to dump stocks and turn to safe-haven assets.
Key Facts
Stocks had their worst day so far in 2022 amid more bad news from the Russia-Ukraine border: The Dow Jones Industrial Average fell 1.8%, over 600 points, while the S&P 500 lost 2.1% and the tech-heavy Nasdaq Composite 2.9%.
The U.S. Ambassador to the United Nations warned that the conflict had reached a “crucial moment” on Thursday morning after Ukraine accused pro-Russian separatists of attacking a village near the border.
President Joe Biden, meanwhile, told reporters that “every indication” points to Russia invading Ukraine in the “next several days,” with evidence pointing to more military buildup, not deescalation, near the border.
Thursday’s ensuing selloff was widespread—hitting nearly all S&P 500 sectors, with financials and tech shares leading the declines and investors turning to safe-haven assets like Gold.
Investors also digested a slew of corporate earnings reports: Shares of Palantir fell roughly 15% after lackluster quarterly profits, while Nvidia’s stock dropped 8% on lower-than-expected margin guidance.
Shares of Walmart rose nearly 4% after topping expectations, Cisco jumped 3% after raising its financial guidance and DoorDash saw its stock surge 9% after posting record order numbers.
Tangent:
Oil prices have been rising amid the heightened Russia-Ukraine tensions recently, though they fell slightly on Thursday, down just over 2%. The price of Brent crude oil still sits at above $90 per barrel.
Crucial Quote:
“Stocks are on edge” and the broad selling has spared few areas of the market, says Vital Knowledge founder Adam Crisafulli. “The situation in Russia/Ukraine is reescalating as Moscow continues to lay the groundwork for the potential absorption of the Donbas breakaway region (or the recognition of that region as an independent state).”
What To Watch For:
In addition to Russia-Ukraine tensions weighing on markets, investors should “remain cautious given the inflation problem facing the Fed,” which is “between a rock and a hard place,” says Chris Zaccarelli, chief investment Officer for Independent Advisor Alliance. “If they tighten economic conditions too quickly, by raising interest rates and reducing the size of their balance sheet, then they risk market turmoil and a slowing of economic growth.”
Further Reading:
Dow Plunges 500 Points, Oil Prices Surge Amid Fears That Russia Will Soon Invade Ukraine (Forbes)
Biden: Russian Invasion Of Ukraine Could Come In Next ‘Several Days’ (Forbes)
Dow Plunges 500 Points As ‘Market Anxiety’ Returns After Latest Inflation Surge (Forbes)
