Stocks extended declines on Monday and oil prices soared as investors nervously considered the potential for even higher inflation and greater global economic damage from Russia’s war in Ukraine and sanctions that have ensued.
The S&P 500 closed down nearly 3% at 4,200.89, its worst day in more than a year, while the Dow fell 2.4% to 32,813.56. The Nasdaq Composite dropped 3.62% at 12,380.96 clocking in its worst day in more than a month, and formally entered a bear market after dropping more than 20% from its recent record high. The German DAX index (DAX) as well as the STOXX 50 (FEZ) also each sank to drop into bear markets. Traders piled into safe haven assets, and gold prices (GC=F) briefly jumped above $2,000 per ounce for the first time since September 2020. U.S. Treasury yields advanced.
In energy markets, Brent crude oil prices (BZ=F), the international standard, soared to as much as $137 per barrel, building on gains over the past several weeks. U.S. West Texas intermediate crude oil (CL=F), likewise, rose to as much as $130.50 a barrel.
The jump in energy prices came as the White House and European nations weighed an import ban on Russian crude oil in a further punitive move for the country’s invasion of Ukraine. Secretary of State Antony Blinken told CNN on Sunday that the Biden Administration was “now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil,” while ensuring global markets remain sufficiently supplied.
The U.S. receives only a small portion of energy products from Russia, with just about 7.9% of total petroleum imports including crude oil coming from the country in 2021, according to the Energy Information Administration. However, such a ban could more negatively impact European countries that have been more reliant on Russian crude oil as well as natural gas for energy. Prices for metals used in fuel cell batteries and other clean energy products including palladium and nickel also spiked on Monday as traders eyed an accelerated move toward renewable…