Dow falls 800 points as investors fear the impact of surging oil prices
Mark Lennihan/AP
- US stocks closed Monday's session lower, with the Nasdaq falling more than 3%.
- Geopolitical turmoil has pushed oil to multi-year highs while other commodities like wheat also spike.
- Morgan Stanley warned that risks to the market will be heightened over the next six to eight weeks.
US stocks fell on Monday, with the Dow Jones Industrial Average down 800 points and the Nasdaq ending lower by over 3% as investors weighed the impact of surging oil prices and eyed possible new sanctions on Russia's energy sector.
The geopolitical turmoil has sent commodities reeling, as wheat, nickel, gold, and oil all soared during Monday trading.
"This war won't end in a month as talks have not provided any meaningful signs of a truce and since Ukrainians have surprised Russia and not given the Kremlin an easy victory," said OANDA senior market analyst, Edward Moya. "Energy stocks still remain a favorite trade and industrials are not too far behind."
Here's where US indexes stood as the market closed at 4 p.m. on Wednesday:
- S&P 500: 4,200.89, down 2.96%
- Dow Jones Industrial Average: 32,813.76, down 2.38% (801.04 points)
- Nasdaq Composite: 12,830.96, down 3.62%
Morgan Stanley analysts said that investors should expect more risk in the coming weeks, as a perfect storm of risk factors — including escalation between Ukraine and Russia — closes in on the market. The analysts advised investors to sell in the event of a market rally.
After GameStop chairman Ryan Cohen revealed a 9.8% stake in Bed, Bath & Beyond, shares of retailer shot up as much as 85% intraday.
Coinbase said it blocked 25,000 Russian accounts in an effort to limit illicit activity amid the ongoing crisis in Ukraine.
West Texas Intermediate crude oil rose 3.5%, to $119.78 a barrel. Brent crude, the international benchmark, jumped 4.5% to $123.42 a barrel. International oil prices were above $130 per barrel earlier on Monday before giving up gains.
After briefly passing $2,000 per ounce, gold traded at 1,996.70. The 10-year Treasury yield was up five basis point to 1.77%.