To be clear, no one knows exactly what the Russian invasion into Ukraine means for financial markets — it’s impossible to say. The Irish ambassador to the United Nations, Geraldine Nason, described it as “staring into the abyss“.
What we do know is that the information flow to trading terminals across the country from worldwide wires today led to widespread and heavy selling. What we do know is that the information flow to trading terminals across the country from worldwide wires today led to widespread and heavy selling.
Global financial markets are worried the conflict will lead to an oil supply shock and serious damage to the global economy — an economy still recovering from a once-in-a-generation pandemic. There’s potential for big losses on stocks in the days and weeks to come. So let’s get a handle on what markets are fretting about.
Meanwhile, Russian stocks crashed by as much as 45% and the ruble hit a record low against the dollar on Thursday. The Moscow market rout was triggered by news that Russian troops had launched an attack on Ukraine, a move that is likely to trigger a new wave of “full scale” sanctions aimed at President Vladimir Putin’s inner circle and Russia’s oil-dependent economy.
A broad offensive by Russian forces targeted military infrastructure across Ukraine as well as several airports. The assault began hours before dawn and quickly spread across central and eastern Ukraine as Russian forces attacked from three sides. Putin warned of bloodshed unless Ukrainian forces lay down their arms. The Moscow stock exchange had suspended trading earlier on Thursday but when dealing resumed, stocks went into free-fall.
Stocks fell sharply Thursday as Russia attacked Ukraine, causing global energy prices to jump and sending investors fleeing for the safety of fixed-income assets. The invasion comes as global equity markets were already reeling because of decades-high inflation stemming from the pandemic.
The S&P 500 was down 2.5%, as the benchmark plunged further into correction territory. The index sits nearly 14% from its Jan. 3 record close. The Dow Jones Industrial Average fell 810 points, or 2.4%. The blue-chip measure is about 12% off its record. The Nasdaq Composite declined 2.5% Thursday. The Nasdaq opened in bear market territory, down more than 20% from its high in November 2021.
