Stock markets are dropping with Russia invading Ukraine. Is it time to sell stocks or buy?

U.S. stocks are dropping as Russia begins invading Ukraine.

The Dow Jones Industrial Average opened more than 700 points lower on Thursday, losing more than 2% of its value. The S&P 500 and the NASDAQ Composite also opened down more than 2%. The tech-heavy NASDAQ briefly turned positive before falling back into negative territory.

Since Russian troops invaded Ukraine late Wednesday night, there have been at least 40 casualties and dozens of people were wounded from explosions that occurred in major cities, including the capital of Kyiv, and the cities of Kharkiv and Odessa.

Biden will address the nation at 12:30 p.m. ET on Thursday to announce additional steps the U.S. will take beyond sanctions already imposed.

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As stocks drop, oil prices are skyrocketing. Crude oil was trading at more than $103 a barrel as of 9:55 a.m. ET, the highest level since 2014.

Should you sell your stocks with Russia-Ukraine invasion?

While some stocks may look like a bargain during the selloff, market analysts say investors should proceed with caution, warning that stocks could slide even further.

“As discomforting as the headlines are, from an investment perspective, we would urge investors not to overreact,” said Keith Lerner, co-chief investment officer at Truist Advisory Services,

“Panic selling has generally not been a winning strategy,” he added in a note.

Besides tensions with Russia, the Federal Reserve is weighing whether to raise interest rates more aggressively to curb inflation, which is at a 40-year high. That could lead to further declines in stocks as higher interest rates mean companies and consumers pay more to borrow, potentially crimping corporate profits.

Even so, analysts say it’s crucial to think ahead.

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“It’s important to recognize that the markets have tended to eventually rebound following geopolitical events, and snapbacks from corrections tend to be very sharp,” Lerner said.

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What stocks should you buy amid Russia’s invasion of Ukraine?

On the flip side, now is a good time to think about buying tech stocks, Daniel Ives and John Katsingris, analysts at Wedbush, said in a note.

“While each geopolitical shock event is different and unique, our playbook since 2000 has been to use these periods of global chaos to buy the tech winners that we view as way oversold in a panic-like sell-off.”

Pay attention to cyber-stocks, Ives and Katsingris said.

“With a significantly elevated level of cyber-attacks now on the horizon, we believe added growth tailwinds for the cyber security sector and well positioned vendors should be a focus sector for tech investors during this market turmoil,” they added.

Will the Fed step back from raising rates?

At its most recent meeting, the Fed announced it plans to raise interest rates, which currently stand at near-zero levels, at least three times this year. The first hike is slated to go into effect next month.

But the economic risks the Russian conflict poses for the U.S. could cause the Fed to rethink its timeline for raising rates and the levels at which they do so.

“The implications of the unfolding situation in Ukraine for the medium-run economic outlook in the U.S. will also be a consideration in determining the appropriate pace at which to remove accommodation,” Cleveland Fed President Loretta Mester said on Thursday, Reuters reported.

As it stands, the conflict doesn’t merit the Fed taking a total 180-degree turn on raising rates, Bill Adams, chief economist for Comerica Bank, said in a note.

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But the invasion makes it “much less likely” that the Fed raises rates by 50 basis points, Adams added, though it “is still very likely to raise rates by a quarter percentage point with U.S. inflation far above target, job growth momentum strong, and domestic demand buoyant.”

It’s also worth considering that inflation could slow even without Fed actions if the U.S. continues to produce more oil domestically.

That will “both constrain oil price rises and help economic growth here,” said Brad McMillan, chief investment officer at Commonwealth Financial Network.

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This article originally appeared on USA TODAY: Dow Jones down as Russia invades Ukraine: Stocks to buy and sell