Dow, S&P 500 Fall, Bond Yields Tick Up on Fear of Ukraine War

On Feb 14, 2022

The Dow Jones Industrial Average and S&P 500 fell on Monday as investors assessed the possibility of war between Russia and Ukraine.

The Dow fell 342 points, or about 1%, in morning trading. The S&P dropped 0.6%. The technology-heavy Nasdaq Composite ticked up 0.3%.

European markets were hard hit by the threat of a possible ground war in Ukraine. The pan-continental Stoxx Europe 600 was recently down 1.9%, led lower by banks and travel and leisure companies.

The index pared losses after Russian Foreign Minister

Sergei Lavrov,

speaking in a meeting with Russian President

Vladimir Putin,

suggested Moscow should continue talks with the U.S. and its allies.

Yields on government bonds were whipsawed by the fast-moving situation. After initially falling as investors reached for the safety of U.S. Treasurys, yields bounced back on Mr. Lavrov’s comments. The yield on 10-year Treasury notes was recently 2.007%, up from 1.951% Friday. Bond yields and prices move in opposite directions.

After weeks in which the brewing conflict appeared to have little impact on Wall Street, U.S. stocks tumbled Friday after the White House warnings that Russia could invade Ukraine at any moment. Moscow has denied intending to invade Ukraine, but Russia’s military buildup has quickened, with forces positioned on three sides of the country.

Oil prices held steady on Monday, after jumping on concern a war would curtail supplies of Russian crude amid a lack significant spare supplies. Futures on Brent, the benchmark in energy markets, slipped less than 0.1% to $94.47 a barrel, holding near its highest level since 2014.

The U.S. believes Russian President Vladimir Putin could order an invasion of Ukraine at any time, even before the Feb. 20 end of the Beijing Olympics, national security adviser Jake Sullivan said Friday. Russia has denied it intends to invade its neighbor. Photo: Russian Defense Ministry/AP

Prices for natural gas, of which Russia is the single biggest exporter globally, rose on both sides of the Atlantic. In the U.S., benchmark gas prices jumped 4.8% to $4.13 per million British thermal units. Prices in Europe, which depends on Russia for much of its gas—a chunk of it flowing through Ukraine—climbed 3.4%.

Russia’s benchmark stock index, the Moex Russia, slid 1.7%. Ukraine’s hryvnia weakened 1.4% to 28.55 a dollar.

Stocks have also been buffeted this year by the prospect of the Federal Reserve raising interest rates. The central bank is gearing up to increase borrowing costs to combat the highest rate of inflation in…