Topline
The stock market moved lower on Monday after oil prices briefly hit more than $130 per barrel overnight—the highest level since July 2008—as the escalating conflict between Russia and Ukraine continued to weigh on investors, who turned to safe-haven assets like gold.
Oil prices surged to more than $130 per barrel before paring back gains.
Key Facts
Stocks fell on Monday after ending last week on a down note: The Dow Jones Industrial Average fell 1.3%, over 400 points, while the S&P 500 lost 1.4% and the tech-heavy Nasdaq Composite 1.7%.
Markets were under pressure yet again as heavy fighting continued in Ukraine, with planned civilian evacuations from several cities over the weekend canceled after Russia reportedly violated a cease-fire agreement.
Oil prices, which have skyrocketed in recent weeks, jumped overnight after U.S. Secretary of State Antony Blinken said on Sunday that the U.S. and its allies are considering a ban on Russian oil and natural gas imports in response to the country’s actions in Ukraine.
U.S. benchmark West Texas Intermediate now sits at $119 per barrel (after hitting $130 overnight), while global benchmark Brent crude is trading at around $123 per barrel (after briefly rising to $139 per barrel).
Gold prices crossed $2,000 per ounce for the first time in over a year, meanwhile, as investors looked for safe-haven assets after Russian President Vladimir Putin pledged to continue his invasion unless Ukraine fully surrendered and met Russia’s original demands.
Energy stocks moved higher on Monday, despite most sectors moving lower—with banks, consumer staples and tech stocks leading declines.
Surprising Fact:
Shares of retailer Bed Bath & Beyond jumped up to 110% in early trading on Monday after investor Ryan Cohen disclosed a 9.8% stake in the company and sent a letter to management criticizing the company’s “disappointing shareholder returns and perpetual underperformance.” He suggested several changes to help boost the stock—including brand spinoffs, a management reshuffle and potentially even a full sale of the company.
Key Background:
Stocks fell last week, with the Dow and S&P 500 each sliding around 1.3%. The Dow declined for a fourth consecutive week, while the S&P 500 closed in on correction territory—meaning that the index is more than 10% below its record highs at the start of 2022. The Nasdaq, which lost nearly 3% last week, has been in a correction since earlier this year.
What To Watch For:
With commodity prices—including everything from wheat to oil—surging in recent weeks amid Russia’s invasion of Ukraine, that is likely to result in a “shock” for markets, which will “undoubtedly” lead to more inflation, says Kristof Gleich, president and chief investment officer at Harbor Capital. Rising oil prices in particular will “cause an impact” at the gas pump, with the average U.S. price for gas rising to more than $4 per gallon over the weekend, according to AAA.
Further Reading:
Dow Hits Fourth Week Of Losses, Oil Nears $120 Per Barrel As Russia’s Invasion Of Ukraine Continues (Forbes)
War Stocks Are Surging As Russia-Ukraine Conflict Rages On: Lockheed Martin, Northrop Up 20% (Forbes)
Dow Jumps 600 Points, Oils Hits 11-Year High As ‘Investors Are Whipsawed’ By Rate Hikes And Russia-Ukraine Conflict (Forbes)
Rate Hikes Are Coming In March Despite ‘Uncertain’ Impact From Russia’s Invasion Of Ukraine, Powell Says (Forbes)
Source: https://www.forbes.com/sites/sergeiklebnikov/2022/03/07/dow-falls-300-points-oil-briefly-hits-130-per-barrel-with-no-end-in-sight-for-russias-invasion-of-ukraine/