Geopolitical tensions heated up on Friday amid reports that Russia is positioning more troops near the Ukraine border.
Additionally, U.S. Secretary of State Antony Blinken cautioned earlier that an invasion could come “at any time,” including during the Beijing Winter Olympics, which are set to end on Feb. 20 – a warning echoed by U.S. National Security Advisor Jake Sullivan at this afternoon’s White House press briefing.
“The Russia-Ukraine tensions have hovered over already shaky investor sentiment,” says John Lynch, chief investment officer for Comerica Wealth Management. “Investors have been counting on a diplomatic resolution, but recent developments indicate this may be wishful thinking and therefore, not fully priced into the markets.”
Today’s Russian-Ukraine news “delivered another body-blow to markets, which were already reeling from stubborn inflation numbers and uber hawkish comments from Fed officials,” says Cliff Hodge, chief investment officer for Cornerstone Wealth.
“The flight to safety is on, as long-end Treasury yields fall, gold rises and the dollar spikes. We may have more downside risk over the coming weeks as markets react to headlines, but investors should put together their shopping list, as there are some interesting opportunities to begin to pick through the wreckage,” he adds.
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Adding fuel to the fire was news that Pfizer (PFE, +0.4%) and BioNTech (BNTX, +2.0%) will delay a request to the Food and Drug Administration (FDA) to expand authorization of their COVID-19 vaccines to children under 5 until early April as they await more data.
Stocks reacted to the headlines in kind, with markets making a beeline lower in afternoon trading, led by sharp losses in the technology (-3.1%), consumer discretionary (-2.9%) and communication services (-2.2%) sectors.
By the close, the Nasdaq Composite was down 2.8% at 13,791, the S&P 500 Index was off 1.9% to 4,418 and the Dow Jones Industrial Average was 1.4% lower at 34,738.
Other news in the stock market today:
- The small-cap Russell 2000 gave back 1% to end at 2,030.
- Rising Russia-Ukraine tensions sent U.S. crude futures spiking 3.6% to $93.10 per barrel. “Crude prices surged after reports that the U.S. is expecting the Russians to move forward with invading Ukraine,” says Edward Moya, senior market strategist at OANDA. “Oil prices will remain extremely volatile and sensitive to incremental updates regarding the Ukraine situation.”
- Gold futures closed up 0.3% to end at $1,842.10 per ounce, and continued to rise in electronic trading. “Gold could rally above the $1,900 level if troop movements occur,” Moya …….