The S&P 500 lost 95.59 points, or 2.1%, to end at 4,379.42, while the Nasdaq fell 406.95 points, or 2.9%, to 13,717.14. The Dow Jones Industrial Average fell 626.98 points, or 1.8%, to 34,307.29.
After Ukrainian forces and pro-Russian rebels exchanged fire in eastern Ukraine, US President Joe Biden said all indications were that Russia was planning an invasion in the coming days and a pretext to justify it.
Russia accused Biden of stirring up tension, releasing a letter saying Washington was ignoring his security demands and threatening unspecified “military-technical measures.”
On Wall Street, the growth-oriented technology and communication services sectors were the hardest hit. The financial sector also fell in line with US Treasury yields.
Events in Ukraine have increased uncertainty about the trajectory of the Federal Reserve’s monetary tightening plans to fight inflation.
“The history of this country is that our adversaries love to test us during periods of leadership transition and this could end very badly, we don’t think it will, but it certainly could.” said Phil Orlando, chief equity strategist at Federated Hermes in New York.
“Based on the timing of what’s happening with the Fed, with inflation, with geopolitical risk, we think the first two or three quarters of the year are going to be very choppy as the market digests it.”he added.
The defensive utilities and consumer staples sectors were the only gainers on Wall Street.
Gold’s rise accelerates: it hits a maximum in eight months
Gold rose this Thursday to a peak in eight months and was approaching the level of $1,900 an ounce. Spot gold rose 1.4% to $1,893.76 an ounce, after hitting its highest level since June 11 at $1,897.41.
US gold futures were up 1.4% at $1,897.80.
“Gold benefited from renewed tensions in Eastern Europe. Palladium is likely to move in a similar fashion, but moves are driven by supply concerns, while gold benefits from its safe-haven status,” said Giovanni Staunovo, an analyst at UBS.
Palladium rose 3.7% to $2,364.76 after hitting a two-week high earlier in the session.
“Gold traders need to worry about the details as it all depends on whether or not Russia attacks,” said Matt Simpson, senior market analyst at City Index.
If Russia invades, gold is likely to rise, but to see a sharp reversal that would send bullion noticeably lower, you would probably need to see Russian troops pouring out of the border, Simpson added.
Among other precious metals, silver was up 1% at $23.78 an ounce and platinum added 2.4% to $1,087.55 an ounce, after hitting a three-month high.
Source: Ambito
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