Stock markets around the globe slumped, oil prices broke above $100 a barrel.
NEW YORK (AP) - Shares around the world fell on Thursday after Russia's attack on Ukraine sparked fear in markets and added pressure on high inflation that is already squeezing the global economy.
On Wall Street, the S&P 500 sank 1.6% in early trading to continue its disappointing start to the year. The benchmark Is Index is now down 13.5 per cent from its record set earlier this year. Stocks in Europe sank even higher after officials called Russia's moves a "brutal act of war", with the German DAX down nearly 5%.
Beyond its humanitarian toll, the conflict is set to send an even greater jump in prices at gasoline pumps and grocery stores around the world. Russia and Ukraine are major producers not only of energy products but also of grain and various other commodities. War could affect global supplies, as could sanctions brought by the United States and other allies.
Oil prices on both sides of the Atlantic jumped more than 6%, at or above $100 a barrel, their highest level since 2014. Wholesale prices also rose on heating oil, wheat and other commodities. The spot price of natural gas in Europe, for which the continent relies on Russia for supplies, jumped 31%.
Rising energy and food prices could raise concerns about inflation, which hit its warmest level in a couple of generations in the United States in January, and what the Federal Reserve will do in return to rein in it. The Fed is sure to remove Super. - Low interest rates that investors love, which helped lift the financial markets and economy out of their coronavirus-induced fall. The only question is how quickly and how aggressively the Fed will move.
Bond yields plunged around the world, a sign that investors are scrambling for anything that could deliver a safer return than stocks and other riskier bets. The yield on the 10-year US Treasury fell to 1.89% from 1.97% late Wednesday. Continuing its strong showing on concerns about Russia and Ukraine, gold also rose 2.4% and climbed higher.
On Wall Street, concerns about higher interest rates have taken the hardest hit on big technology stocks, a change after those companies are set to pull Wall Street out of their coronavirus-caused plummet in 2020.
The Nasdaq Composite, which is filled with large tech stocks, sank 1.5% and could close down more than 20% from its record set on November 19, 2021. If it does, Wall Street calls it a "bear market," something it hasn't for the Nasdaq since the coronavirus first crashed the global economy.
The Dow Jones Industrial Average fell 647 points, or 2%, to 32,490.
ING's Chris Turner and Francesco Pesol said in a report that financial markets "could pay a price in flight to safety and slow growth" due to high energy costs.
In Brussels, the president of the European Commission said on Thursday that the 27-nation EU plans "massive and targeted sanctions" on Russia.
"We will hold President Putin accountable," Ursula von der Leyen said.
The FTSE 100 in London fell 3.1% after Europe woke to news of explosions in Ukraine's capital Kiev, the major city of Kharkiv and other regions. The CAC 40 in Paris declined 4%.
Moscow's Stock Exchange temporarily suspended trading in all its markets on Thursday morning. After trading resumed, the ruble-denominated MOEX stock index fell by more than 20% and the dollar-denominated RTS index fell by more than a third.
Some analysts believe the conflict will drive investors out of many tech stocks, except in the cybersecurity sector.
Analysts at Wedbush Securities wrote in a note to clients, "There is a growing concern that large-scale cyber warfare may be on the near-term horizon that will certainly catalyze increased spending to prevent sophisticated Russian-based cyberattacks." will do."
Putin said Russia had to protect civilians in eastern Ukraine, a claim Washington predicted would justify an invasion.
President Joe Biden called the attack "unprovoked and unjust" and said Moscow would be held accountable, meaning many implored Washington and its allies to impose additional sanctions. Putin accused him of ignoring Russia's demand to stop Ukraine from joining NATO and offer Moscow security guarantees.
Washington, Britain, Japan and the European Union had previously imposed sanctions on Russian banks, officials and business leaders. Additional options include blocking Russia from the global system for bank transactions.