Topline
Stocks fell on Monday, with the Dow dropping roughly 400 points, as a fresh round of Western sanctions slammed Russia’s financial markets, though the market’s losses were tempered by reports that Russian and Ukrainian officials are meeting to discuss a potential end to the conflict, even as Russian troops continue their offensive on the capital city of Kyiv.
Markets continue to take a hit from ongoing uncertainty around the Russia-Ukraine conflict.
Key Facts
Stocks fell sharply at the open: The Dow Jones Industrial Average was down 1.2%, around 400 points, while the S&P 500 lost 1.1% and the tech-heavy Nasdaq Composite nearly 1%.
Energy prices surged yet again on Monday, with Brent crude rising more than 3% to over $100 per barrel, with experts warning that prices could surge higher amid the fallout from the conflict.
The Russian ruble plunged up to 30% against the U.S. dollar on Monday amid the latest round of Western sanctions, while the Moscow stock exchange was shut for the day and Russia’s central bank more than doubled interest rates to 20%.
The moves come after the latest round of Western sanctions, which have slammed Russia’s economy: The United States joined European allies over the weekend in blocking Russian banks from the interbank messaging system, SWIFT, which connects more than 11,000 financial institutions in over 200 countries.
Though stocks were moving lower Monday, market sentiment did get a slight boost from reports that Russian and Ukrainian officials are meeting near the border to negotiate a potential end to the conflict.
Despite officials meeting for talks, Russia has continued its assault on Ukraine, entering the country’s second-largest city over the weekend (though Ukrainian troops have put up more resistance than expected and still hold the capital of Kyiv).
Crucial Quote:
“Putin’s assault on Ukraine is proving to be a massive folly for his country as his military fails to capture any major cities while the international community responds with a crushing series of financial counterattacks,” says Vital Knowledge founder Adam Crisafulli. While stocks have taken a hit from the ongoing hostilities, “investors will obviously be watching very closely” for updates on the negotiations between Russia and Ukraine.
Key Background:
Markets have undergone volatile trading in recent weeks as tensions between Russia and Ukraine escalated, with Russian President Vladimir Putin officially launching his invasion of the country last Thursday. Stocks rebounded strongly on Friday—with the Dow jumping 800 points for its best day since late 2020—as reports first emerged about Russia saying it would be open to talks with Ukraine.
Further Reading:
Live: Heavy Shelling Continues In Kharkiv Amid Ceasefire Talks (Forbes)
Russia’s Invasion Of Ukraine Has Sent Energy Prices Soaring—Here’s How High Oil Could Rise (Forbes)
Dow Jumps Over 800 Points After Russia Says It’s Open To Talks With Ukraine (Forbes)
Nasdaq Briefly Falls Into Bear Market But Stocks Rebound After Russia Invades Ukraine (Forbes)
Source: https://www.forbes.com/sites/sergeiklebnikov/2022/02/28/dow-falls-400-points-as-investors-weigh-latest-sanctions-on-russia/