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United States Stocks End Higher After New Russian Sanctions Announced
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U.S. stocks fluctuated wildly Thursday, starting the day with a sharp drop and then recovering as investors piled into growth and technology stocks in the wake of Russia’s invasion of Ukraine.
Stocks fell in the aftermath of the attacks on cities across Ukraine, while oil, gold and government notes rose. Investor optimism grew, however, after President Biden in an afternoon address announced new sanctions on Russian elites, state-owned enterprises and banks. The European Union later announced its own sanctions.
Russian President Vladimir Putin’s “aggression in Ukraine will end up costing Russia dearly, economically and strategically,” said Mr. Biden.
The S&P 500 closed up 63.20 points, or 1.5%, to 4288.70. The tech-heavy Nasdaq Composite finished ahead 436.10 points, or 3.3%, to 13473.59. The Dow Jones Industrial Average gained 92.07 points, or 0.3%, to 33223.83.
The Russian ruble weakened to a record low, declining 4.5% against the dollar, while the MOEX benchmark for Russian stocks tumbled by about a third. The Russian central bank said it would intervene in the foreign-exchange market and banned short selling. Ukraine’s foreign-exchange market suspended operations, according to its central bank. The country’s stock exchange also said it was postponing activity.
Brent crude, the global oil benchmark, topped $100 a barrel for the first time since 2014, with the front-month contract settling up $2.24 per barrel, or 2.3%, to $99.08. Prices for its U.S. equivalent, West Texas Intermediate, also rose.
The invasion has heightened the pressure on a global economy already reeling from snarled supply chains and some of the highest inflation in years, with Europe likely to bear the brunt of the economic impact. Some investors, betting that the Federal Reserve won’t act as aggressively to curb inflation at a time of heightened tensions, reopened their pandemic-era playbooks, piling into riskier assets in the second half of the trading session.
A pullback in the yield of the benchmark 10-year Treasury note Thursday added wind to the sails of growth companies. Yields settled at 1.969%, from 1.976% on Wednesday. Bond yields fall as prices rise.
“That makes people more comfortable buying growth stocks,” said Gary Black, manager of the Future Fund Active exchange-traded fund. Mr. Black owns Alphabet and Palo Alto Networks, among other growth stocks.
Dramatic moves marked Thursday’s trading. The Nasdaq Composite fell more than 3%, then closed up more than 3%, for the first time since November 2008, according to Dow Jones Market Data. The S&P 500 finished higher after falling at least 2.5% for only the 16th time in the past 15 years. The Cboe Volatility Index rose to the highest level in over 15 months.
The S&P 500’s information-technology and consumer-discretionary sectors were the biggest gainers, adding 3.5% and 2.5%, respectively. Netflix added $22.57, or 6.1%, to $390.03; Twitter gained 2.22, or 6.8%, to $34.98. Alphabet advanced $102.06, or 4%, to $2,653.82.
The Defiance Next Gen SPAC Derived exchange-traded fund, which tracks special-purpose acquisition companies, advanced $0.54, or 3.2%, to $17.40. Meme stocks also rose: AMC Entertainment jumped $1.95, or 12%, to $17.68, while GameStop climbed $9.71, or 8.5%, to $124.58.
Natural-gas futures in Europe surged 50%. Benchmark prices for aluminum and nickel, two metals of which Russia is a major producer, rose to their highest levels in about a decade. Wheat and corn futures advanced to multiyear highs. Russia and Ukraine are major grain producers.
“We haven’t had any serious military conflict in Europe for a very long time, so there’s no playbook for this,” said Gregory Perdon, chief investment officer at Arbuthnot Latham. “A lot has changed since last night.”
Gold, which like U.S. Treasury bonds typically rallies in times of stress, rose in price. The front month gold futures contract rose $15.90 per troy ounce, or 0.8%, to $1,925.10.
The dollar strengthened, with the WSJ Dollar Index gaining 0.8%. Currencies considered to be havens, such as the Japanese yen, also appreciated, while bitcoin recovered losses, trading up 2.2% to $38,395.65 from its 5 p.m. ET level on Wednesday.
The Russian attack came as volatility in markets was already heightened because of looming changes in Fed monetary policy.
Investors are building up cash buffers because of the market stress, said Florian Ielpo, head of macro at Lombard Odier Investment Managers. The company’s multiasset funds currently hold the most cash since the market crash in March 2020.
Markets are expecting a standard 0.25 percentage point increase at the Fed’s meeting next month, rather than a more aggressive 0.5 percentage point increase. As of Thursday, market pricing showed the probability of a bigger rate increase fell to 13% from 34% the day before, according to CME Group data.
“We might move past the geopolitical impact, but the market is still going to be concerned about the Fed’s intentions to move rates higher,” said Lindsey Bell, Ally’s chief markets and money strategist.
In economic data, weekly U.S. jobless claims came in at 232,000, a decline from the previous week and in line with analysts’ expectations in the midst of a tight labor market.
Global markets fell. The pan-continental Stoxx Europe 600 dropped about 3.3%. Hong Kong’s Hang Seng Index decreased over 3%. Japan’s Nikkei Stock Average closed at its lowest level since November 2020.
—Megumi Fujikawa, Will Horner and Quentin Webb contributed to this article.
Write to Hardika Singh at hardika.singh@wsj.com, Anna Hirtenstein at anna.hirtenstein@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com
News and insights on Russia's invasion of Ukraine and escalating tensions with the West, selected by the editors
Russia Attacks Ukraine, Drawing Broad Condemnation
Putin's Aggressive Bid to Restore Russia's Place in the World
Ukraine Under Fire: Hiding in Basements, Helicopters Overhead
West Adds Sanctions But Debates How Hard to Hit
Oil Prices Surge Above $100 a Barrel
Russia's Strike on Ukraine Will Change the World
Crisis Kicks Off a New Superpower Struggle
Why Is Russia Invading Ukraine and What Does Putin Want?
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Appeared in the February 25, 2022, print edition as 'Stocks, Commodities Gyrate After Moscow Begins Attack.'
