[New York Stock Market] Increased Volatility... Mixed Trends Amid Monitoring of Russia Sanctions Impact

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] As the United States and other Western countries continue to announce increasingly strengthened sanctions against Russia, which invaded Ukraine, volatility in the New York stock market has also intensified. On the 28th (local time), major indices in the New York stock market showed mixed trends. While a flight to safe-haven assets was prominent overall, among the three major indices, only the tech-heavy Nasdaq index rallied in the late session and closed higher.

On that day, the Nasdaq index, centered on technology stocks, closed at 13,751.40, up 56.78 points (0.41%) from the previous session. The Nasdaq index started the day lower but showed a rollercoaster pattern of rising and falling throughout the session before sharply rebounding and turning positive just before the close. The Dow Jones Industrial Average fell 166.15 points (0.49%) to 33,892.60, and the S&P 500 index closed down 10.71 points (0.24%) at 4,373.94.

Investors focused on the Western countries' sanctions against Russia following its invasion of Ukraine and the resulting economic impact. The United States announced additional sanctions that completely block transactions with the Russian central bank, sovereign wealth fund, and the Russian Ministry of Finance. Additionally, the United States, the Group of Seven (G7), and the European Union (EU) revealed measures to exclude Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment network.

Raymond James strategist Tavis McCourt told CNBC, "Everything happening right now is unprecedented," adding, "The only reasonable thing to say about stocks is that volatility will continue until a resolution is reached." The volatility index (VIX), Wall Street's fear gauge, surged more than 9% to reach the 30 level.

By sector, bank stocks faced downward pressure. JPMorgan Chase and Citigroup slid more than 4% from the previous session. BP dropped nearly 5% following the sale of its stake in Russian state-owned oil company Rosneft.

On the other hand, leading defense stocks Lockheed Martin closed up 6.67%. Northrop Grumman also soared 7.93%. Cybersecurity stocks, including CrowdStrike which rose more than 7%, showed strength and helped lead the Nasdaq index's turnaround to gains.

Technology stocks also showed an upward trend. Leading tech stock Tesla closed up 7.48% from the previous session. Nvidia (0.94%), Apple (0.16%), Microsoft (0.50%), and Meta Platforms (0.26%) also posted modest gains.

A flight to safe-haven assets was also confirmed. The yield on the U.S. 10-year Treasury note fell from the 1.98% range last week to the 1.83% range on this day. A decline in Treasury yields indicates a rise in the price of safe-haven government bonds. The 2-year Treasury yield, sensitive to monetary policy, also dropped to the 1.43% range.

The price of gold, a representative safe-haven asset, rose 1.29% from the previous session to $1,912 per ounce. Strategist McCourt said, "War fundamentally creates a 'risk-off' environment for risky assets," and predicted that this flight to safe-haven assets would continue for the time being. The Russian and Ukrainian delegations concluded talks in Belarus on this day and agreed to hold a second round of talks soon.

International crude oil prices also rose again amid ongoing geopolitical tensions. On the New York Mercantile Exchange, the April West Texas Intermediate (WTI) crude oil price closed at $95.72 per barrel, up $4.13 (4.5%) from the previous session. This is the highest closing price since late August 2014.