U.S. stocks traded mixed and energy prices rose on Monday after sanctions on Russia escalated over an ongoing conflict in Ukraine, adding to further uncertainty about the outlook for markets. global financials.
The S&P 500 and the Dow Jones both fell, while the S&P 500 fell. The Nasdaq turned positive after opening lower. West Texas Intermediate Crude Oil Prices CL=F.) up to $99.10 a barrel before paring some of the gains. Brent (BZ=F.), the international benchmark, hit a seven-year high of over $104 a barrel. Gold prices surged as Treasury yields fell as investors piled into safe-haven assets.
Monday’s market moves came after a tumultuous weekend of fighting in Ukraine as Russia continued its attacks. A new round of sanctions has criticized Russia as major Western nations reacted to the invasion. And the news of it Russian President Vladimir Putin has put the country’s nuclear deterrents on high alert Added to the strain in global financial markets.
United States, European Commission, France, Germany, Italy, United Kingdom and Canada On Saturday, he issued a joint statement of approval to exclude some of the main Russian banks from the SWIFT messaging system, which facilitates transactions for trillions of dollars in the world. The United States also said on Monday that it barred Americans from dealing with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federations and the Ministry of Finance of the Russian Federation.
Banning Swift banks “will make it more difficult (but not impossible) for these institutions to make cross-border payments,” wrote Neil Schering, chief economist at Capital Economics, in a note on Monday. “So far at least, the West has not gone so far as to ban energy imports from Russia, which would be the toughest punishment they could apply.”
“At the same time, the United States, the European Union, the United Kingdom and Canada announced sanctions against the Russian Central Bank,” Schering added. “This is perhaps an even more important step because it will significantly reduce the CBR’s ability to liquidate its foreign assets to support the ruble and help Russian companies service foreign currency-denominated liabilities. About 40% of Russia’s international reserves are held in the financial systems of countries that have signed these sanctions.
The latest sanctions imposed by the West add to a series of sanctions imposed last week on major Russian financial institutions, sovereign debt and key officials. The ruble opened down around 30% against the dollar in offshore trading, and Russia’s central bank more than doubled its benchmark interest rate to a two-decade high of 20% in the purpose of helping to counter the depreciation of the currency.
“While market fundamentals in the United States have deteriorated ever so slightly, sentiment concerns are unlikely to change anytime soon. From a market perspective, sanctions against Russia are likely to have the most impact. impact on currency markets, including the rouble, euro and euro-dollar, Bahnsen Group chief investment officer David Bansen wrote in an email Monday morning.
Investors are still closely watching the future impact on financial markets and global businesses. Automakers including Volkswagen, Renault and Finnish tire maker Nokian Tyres halted or changed production late last week due to supply chain disruptions and shortages, exacerbated by the Russian invasion from Ukraine. While the sanctions did not curb energy exports from Russia, the world’s third-largest oil producer, traders remained vigilant for any direct or indirect impact of the geopolitical dispute on already strained global energy markets.
“We still believe the overall impact on global supply chains will be relatively small, but the expulsion of some Russian banks from the SWIFT system means that non-energy trade between Russia and Europe is likely to decline,” said Schering of Capital Economics. “Attacks on the infrastructure that transports gas to Western Europe could further increase prices and increase inflationary pressure. Additional sanctions could lead to retaliation from Russia, which could reduce energy imports into Western Europe.
10:11 a.m. ET: U.S. goods trade gap hits record high as imports hit record high
The U.S. goods trade deficit hit a record high in January after the value of imports jumped further as businesses seek to meet growing consumer demand.
The trade deficit hit $107.6 billion in early 2022, the Commerce Department said Monday. That was more than the $99.5 billion expected by economists, according to Bloomberg data, and increased the merchandise trade deficit by $100.5 billion from December.
Imports rose $4.4 billion in January from December to $262.5 billion – also a record. Meanwhile, exports fell $2.8 billion, falling to $154.8 billion in January.
Almost all categories of goods recorded an increase in their imports during the month. By percentage, food, feed and beverages saw the biggest jump at 8.6%, increasing in value to $17 billion. Imports of industrial supplies and capital goods rose about 2% to nearly $62 billion and $69 billion, respectively.
The 12.5% drop in consumer goods exports largely contributed to the overall contraction in January exports. Exports of motor vehicles and industrial supplies also fell.
9:31 a.m. ET: Stocks open lower
Here’s where the markets traded after the opening bell on Monday morning:
7:55 a.m. ET Monday: Stock futures plunge with Russian invasion, sanctions escalate
Here are the main moves in the markets on Monday morning:
S&P 500 Futures Contracts (ES=F.): -45 points (-1.03%) to 4,335.00
Futures contracts on DowYM=F.): -304 points (-0.89%) to 33,690.00
Nasdaq Futures ContractsNQ=F.): -136.25 points (-0.96%) to 14,044.25
believed (CL=F.): + 4.14 dollars (+ 4.52%) to 95.73 dollars per barrel
gold (CG=F.): +$23.20 (+1.23%) to $1,910.80 per ounce
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter
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