[New York Stock Market] Dow Hits Yearly Low... Plummets Amid Ukraine War Fears

[Image source=Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] As the possibility of armed conflict between Russia and Ukraine increased, major indices on the U.S. New York Stock Exchange all fell sharply on the 23rd (local time). The Dow Jones Industrial Average hit a new low for the year, retreating for the fifth consecutive trading day, while the S&P 500, which re-entered a technical correction phase the previous day, widened its losses. Investor sentiment froze amid the looming fear of war.

On this day at the New York Stock Exchange (NYSE), the Dow closed at 33,131.76, down 464.85 points (1.38%) from the previous trading day.

The large-cap focused S&P 500 fell 79.26 points (1.84%) to 4,225.50, and the tech-heavy Nasdaq index closed at 13,037.49, down 344.03 points (2.57%).

As the war tension surrounding Ukraine deepened, the three major indices each hit intraday lows. The small-cap focused Russell 2000 index also dropped 1.82% compared to the previous session.

By sector, weakness was confirmed in travel stocks such as airlines and cruise lines, as well as technology stocks. Delta Air Lines plunged nearly 2% from the previous close. Carnival closed down 6.04%. Tesla, a representative tech stock, closed down 7%. Nvidia (-4.29%), Apple (-2.48%), Alphabet A (-1.71%), Microsoft (-2.56%), Meta Platforms (-1.80%), and Amazon.com (-3.54%) also slid consecutively.

In the retail sector, Macy's fell 5%, and TJX Companies dropped more than 7%. Best Buy and Nordstrom also closed down 2.12% and 2.41%, respectively. However, Lowe's Companies rose more than 4% after releasing better-than-expected earnings.

In the bond market that day, the U.S. 10-year Treasury yield rose to 1.989%, approaching a re-entry into the 2% range. The price of gold, a representative safe-haven asset, also rose slightly to $1,911.50 per ounce compared to the previous close. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s “fear index,” rose more than 7% to the 31 level. Edward Moya, senior market analyst at OANDA, predicted, "Until it becomes clear whether the Ukraine situation will lead to a diplomatic solution or war, the stock market will struggle."

Investors are paying close attention to news escalating tensions between Russia and Ukraine. After U.S. President Joe Biden announced the first sanctions against Russia the previous day, Russia warned it would retaliate with counter-sanctions on the same day. Russian President Vladimir Putin expressed disappointment with the U.S. and NATO’s response during a call with Turkish President Recep Tayyip Erdo?an.

The Biden administration also added official sanctions on ‘Nord Stream 2,’ which transports natural gas to Europe. These sanctions effectively target Russia’s state-owned gas company Gazprom. White House officials have raised warnings that additional sanctions, including export controls, could be imposed even if Russia does not take further aggressive actions against Ukraine.

Moreover, the possibility of armed conflict increased further as the U.S. reportedly obtained intelligence indicating that Russia is preparing for a full-scale invasion within the next 48 hours and conveyed this to Ukraine.

Besides the Ukraine risk, the market is also focusing on inflation and the U.S. Federal Reserve’s monetary policy. According to the CME Group’s FedWatch tool, the market fully prices in a rate hike by the Fed in March.

International oil prices rose amid ongoing geopolitical tensions surrounding Ukraine. On this day at the New York Mercantile Exchange, the April West Texas Intermediate (WTI) crude oil price closed at $92.10 per barrel, up $0.19 (0.2%) from the previous close.