Category: Financial Market

Wall Street’s main benchmarks clawed back from session lows Thursday after Russia’s military invasion of Ukraine overnight rocked equity markets across the globe.

The Nasdaq Composite rebounded from a morning sell-off that saw the index tumble more than 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The Dow Jones Industrial Averaged recouped some losses after an 800-point nosedive but continued to trade lower, down more than 500 points to 32,591.57. The S&P 500 bounced back from a drop of 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to hover just below its flatline.

Meanwhile, investors flocked to safe-haven plays amid a broader risk-off trade across global markets. Gold prices surged 2.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $1,970 an ounce, hovering around a one-year high. WTI crude oil jumped to its highest level since July 2014, notching the biggest surge since Nov. 2020.

President Joe Biden on Thursday said in a tweet Thursday that he and G7 counterparts agreed to move forward on “devastating packages of sanctions and other economic measures” in condemnation of Russia’s attack on Ukraine.

“I condemned this unprovoked and unjustified attack by Russian military forces,” Biden said in a seperate tweet, also indicating he spoke with Ukrainian President Volodymyr Zelenskyy on steps the administration is taking to rally international condemnation.

President Joe Biden unveiled the “first tranche” of financial sanctions Tuesday targeting Russia in response to Vladimir Putin’s move to recognize the independence of two pro-Moscow separatist republics in east Ukraine and deploy troops into the areas — a move seen by Western countries as a provocation and breach of international law.

European allies acted in lockstep to reprimand Russian aggression. Germany halted approval of the Nord Stream 2 natural gas pipeline that would have deepened western Europe’s energy link to Russia, the world’s largest natural gas exporter. Fears of other energy-linked sanctions sent crude oil prices to a seven-year high and Brent crude towards $100 per barrel.

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“Putin knew these were going to be coming,” CSIS International Security Program senior adviser Mark Cancian told Yahoo Finance Live. “He took his move anyway, so it’s unlikely that they will deter him.”

Risk assets slid on Tuesday as investors considered the financial market implications of an escalating threat of military attack and greater sanctions on Russia. As European allies also coordinated their response to Russia’s increased military presence in and around Ukraine, Germany halted approval of the Nord Stream 2 natural gas pipeline that would have deepened western Europe’s energy link to Russia, the world’s largest natural gas exporter. Crude oil prices spiked to a seven-year high, and Brent crude neared $100 per barrel as investors contemplated the potential for further energy-linked sanctions on Russia, the third-largest oil producer in the world.

In the U.S., the conflict creates an added headwind for investors already grappling with a hawkish shift in Federal Reserve policy to intervene more aggressively in mitigating inflationary pressures. A war between Russia and Ukraine threatens to exacerbate already surging prices and spur other economic disruptions that could complicate the Fed’s policy-making choices.

Many strategists have argued that despite the weight of geopolitical turmoil on equities, the risk-off mood among traders stems primarily from worries around interest rate hikes.

“So far, it looks like Ukraine is not the reason for the drop, despite the fears,” Commonwealth Financial Network Chief Investment Officer Brad McMillan said in a note.

“But what has pulled the markets down, if not the Ukraine crisis?” McMillan wrote. “The most likely candidate—one which makes both fundamental and mathematical sense — is higher interest rates”

Brad McMillan points out that since the start of the year, the 10-Year U.S. Treasury yield is up from 1.63{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 1.97{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} at an increase of 34 basis points, or 21{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Typically, higher yields mean lower valuation, pushing the forward price/earnings ratio for the S&P 500 from roughly 22.35 at the end of 2021 to an estimated 19.1, a 15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} decline.

“After adjusting for earnings beats this quarter, that drop in valuations pretty much explains the drop in the market, and that rationale doesn’t leave much, if any, room for worries about Ukraine,” McMillan noted. “Wall Street, then, seems to be much more worried about Fed Chairman Jay Powell than Vladimir Putin, at least at the moment.”

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3:07 p.m. ET: SEC launches investigation into Elon Musk and brother’s stock sales

The Securities and Exchange Commission has initiated a probe into whether stock sales by Tesla Inc. (TSLA) Chief Executive Elon Musk and his brother violated insider trading rules, according to a report by the Wall Street Journal that cited people familiar with the matter.

The watchdog’s investigation began last year after the Tesla leader’s brother Kimbal Musk sold $108 million worth of company shares the day before Musk tweeted a poll asking whether he should sell 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of his stake in Tesla.

Musk framed the potential sale as a way to cover taxes he would owe if lawmakers imposed new taxes on unrealized capital gains. Musk began selling billions of dollars worth of Tesla shares in the days following his tweet.

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1:45 p.m. ET: UK reveals new package of sanctions to reprimand Russian aggression

Prime Minister Boris Johnson unveiled Britain’s largest-ever package of sanctions against Russia the West responds to the Kremlin’s invasion of Ukraine.

The sanctions target banks, members of President Vladimir Putin’s closest circle and wealthy Russians who frequent London.

“This hideous and barbarous venture of Vladimir Putin must end in failure,” Johnson told parliament Thursday. “For our part today, the UK is announcing the largest and most severe package of economic sanctions that Russia has ever seen.”

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1:18 p.m. ET: President Biden warns of “devastating packages of sanctions” against Russia

President Joe Biden is expected to unveil new sanctions against Russia on Thursday after Moscow launched a full-scale military attack on Ukraine, triggering condemnation and financial penalties from the United States and European allies.

The president is scheduled to announce the new measures at 1:30 p.m. ET, according to the White House.

Biden met with G7 allies Thursday to plan measures against Russia after the Kremlin initiated what the president deemed “a premeditated war” against Ukraine.

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12:47 p.m. ET: Mortgage rates fall slightly lower after nearing 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Mortgage rates slipped this week as U.S. Treasuries were weighed down by Russia’s invasion of Ukraine.

The rate on the average 30-year fixed home mortgage fell to 3.89{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, down from 3.92{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} a week ago, according to Freddie Mac. A year ago, 30-year loans averaged 2.97{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Mortgage rates have surged roughly 84 basis points since December, leading to a decline in applications for home lending.

“Even with this week’s decline, mortgage rates have increased more than a full percentage over the last six months,” Freddie Mac chief economist Sam Khater said. “Overall economic growth remains strong, but rising inflation is already impacting consumer sentiment, which has declined in recent months. As we enter the spring homebuying season with higher mortgage rates and continued low inventory, we expect home price growth to remain firm before cooling off later this year.”

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11:27 a.m. ET: Stocks claw back from morning sell-off to turn mixed

Here were the main moves in markets as of 11:27 a.m. ET:

• S&P 500 (^GSPC): -40.03 (-0.95{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,185.47

• Dow (^DJI): -588.72 (-1.78{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,543.04

• Nasdaq (^IXIC): -6.11 (-0.05{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,031.38

• Crude (CL=F): +$5.56 (+6.04{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $97.66 a barrel

• Gold (GC=F): +$17.00 (+0.89{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,927.40 per ounce

• 10-year Treasury (^TNX): -3.1 bps to yield 1.9460{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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11:16 a.m. ET: U.S. new home sales drop in January as prices charge higher

New U.S. single-family home sales posted a marginally higher-than-expected decline last month, likely due to rising mortgage rates and higher prices.

The Commerce Department said new home sales fell 4.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to a seasonally adjusted annual rate of 801,000 units in January. Meanwhile, December’s sales pace was upwardly revised to 839,000 units from the 811,000 units initially reported.

Economists surveyed by Bloomberg projected a print of 802,000. Drops in sales occurred mainly in the Midwest, Northeast and the South, while increasing in the western part of the country.

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10:55 a.m. ET: Russian stocks erase $200 billion in market value

The sell-off in Russian stocks Thursday following its military invasion of Ukraine marked the third-worst plunge in market history in local currency terms as, according to Bloomberg data.

The benchmark MOEX Russia Index traded 38{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower as of 5:28 p.m. in Moscow, wiping out more than $200 billion in shareholder assets as Western leaders condemned the Kremlin and vowed to take action against the country.

According to Bloomberg’s analysis of historical figures, this is the first time since 1987 that such a large selloff has hit a market bigger than $50 billion.

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9:30 a.m. ET: Russian military attack roils equity markets across the globe

Here’s how U.S. stocks fared at Thursday’s open:

• S&P 500 (^GSPC): -107.90 (-2.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,117.60

• Dow (^DJI): -808.48 (-2.44{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,323.28

• Nasdaq (^IXIC): -344.03 (-2.57{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,037.49

• Crude (CL=F): +$7.00 (+7.60{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $99.10 a barrel

• Gold (GC=F): +$43.60 (+2.28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,954.00 per ounce

• 10-year Treasury (^TNX): -8.5 bps to yield 1.8920{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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8:38 a.m. ET: Jobless claims renew decline after uptick in prior read

First-time unemployment filings dipped in the latest weekly data, resuming a recent downward trend in jobless claims after a temporary spike.

The Labor Department most recent weekly jobless claims report showed 232,000 Americans filed for unemployment in the week ended Feb 19., down from a revised 249,000 during the prior period. Economists surveyed by Bloomberg projected a read of 235,000, according to consensus data.

Prior to the latest figure, jobless claims ticked up slightly after a consistent decline that signaled Omicron-related pressures on the labor market were beginning to abate following a temporary surge in mid-January to a print of nearly 300,000.

“Ongoing issues with labor supply has led companies to increase retention rates, which has contributed to the low level of jobless claims,” Bank of America economists wrote in a note published Friday. “We expect this to persist over the course of the year.”

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7:00 a.m. ET: Contracts on S&P 500, Dow, and Nasdaq erase more than 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Here were the main moves in markets in pre-market trading Thursday:

• S&P 500 futures (ES=F): -91.75 points (-2.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,130.25

• Dow futures (YM=F): -741 points (-2.24{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 32,325.00

• Nasdaq futures (NQ=F): -372.50 points (-2.76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,135.00

• Crude (CL=F): +$7.78 (+8.45{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $99.88 a barrel

• Gold (GC=F): +$52.70 (+2.76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,963.10 per ounce

• 10-year Treasury (^TNX): +2.9 bps to yield 1.9770{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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10:57 p.m. ET Wednesday: Dow futures plunge more than 700 points after Russia announces troops to enter Ukraine

Here were the main moves in markets as of 11:02 p.m. ET:

• S&P 500 futures (ES=F): -87.75 points (2.08{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,134.25

• Dow futures (YM=F): -709.00 points (-2.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 32,357.00

• Nasdaq futures (NQ=F): -340.25 points (-2.52{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,167.25

• Crude (CL=F): +$2.65 (+2.88{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $94.75 a barrel

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6:00 p.m. ET Wednesday: Futures open flat after S&P 500, Dow and Nasdaq notch fresh 2022 lows

Here were the main moves in markets in extended trading Wednesday:

• S&P 500 futures (ES=F): +0.50 points (+0.01{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,222.50

• Dow futures (YM=F): +23.00 points (+0.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 33,089.00

• Nasdaq futures (NQ=F): +2.75 points (+0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 13,510.25

• Crude (CL=F): +$0.56 (+0.61{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $92.66 a barrel

• Gold (GC=F): +$1.40 (+0.07{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,911.80 per ounce

• 10-year Treasury (^TNX): +2.9 bps to yield 1.9770{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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