Markets quivered Monday amid worries about how high oil prices will go and how badly the global economy will get hit after the U.S. and allies upped the financial pressure on Russia for its invasion of Ukraine. Stocks swung down, up and then back down, and investors herded into bonds in search of safety and the value of the Russian ruble plunged to a record low. The S&P 500 was 1.3% lower in afternoon trading after Western allies moved over the weekend to block some Russian banks from a key global payments system. The U.S. Treasury Department also announced new and powerful sanctions against Russia’s central bank. The Biden administration said Germany, France, the UK, Italy, Japan, European Union and others will join the U.S. in hitting Russia’s central bank, which said the Moscow stock exchange would remain closed Monday. Stocks on Wall Street trimmed their losses through the morning, at one point flipping to modest gains, after big tech stocks and others that benefit most from low interest rates rallied. The war in Ukraine is raising expectations that the Federal Reserve may have to take it more slowly in its campaign to raise interest rates in order to fight inflation. Other markets were showing more fear about the rising antagonism between Russia and the U.S. and its allies. Oil prices on both sides of the Atlantic climbed more than 4% amid concerns about what will happen to crude supplies, because Russia is one of the world’s largest energy producers. That’s upping the pressure on the already high inflation squeezing households around the world. In search of safer returns, investors plowed into U.S. government bonds, which drove the yield of the 10-year Treasury down about 0.12 percentage points to 1.86%, on pace for one of its sharpest drops since the omicron coronavirus variant first rattled investors. Gold rose 0.7%. They’re just the latest sharp swings for markets, which were relaxing in relief just on Friday, in part on thoughts that sanctions against Russia weren’t as severe as they could have been. More sharp turns are likely in the hours and days ahead given all the uncertainty about the war. “Right now the situation is fluid and investors are looking for the next shoe to drop,” said Barry Bannister, chief equity strategist at Stifel. The pressure on Russia isn’t coming only from governments. London-based energy giant BP said Sunday it would dump its investment in Rosneft, a Russian energy company. BP has held a nearly 20% stake in Rosneft since 2013, and its shares listed in London fell 3.9%. European stocks broadly have fallen more sharply than their U.S. counterparts given how much more closely tied Europe’s economy is to Russia and Ukraine. Germany’s DAX dropped 0.7%, France’s CAC 40 fell 1.4% and the FTSE 100 in London lost 0.4%. In the U.S., the Dow Jones Industrial Average was down 581 points, or 1.7%, at 33,481, as of 2:11 p.m. Eastern time. The Nasdaq composite was 1% lower. Markets had already been on edge before Russia’s invasion, worried about upcoming hikes in interest rates by the Federal Reserve, which would be the first since 2018. Fed Chair Jerome Powell is scheduled to testify before Congress later this week, where he could offer clues on the path for interest rates. A report […]

The post Swings Return To Wall Street, Oil Up After Russia Sanctions appeared first on The Yeshiva World.