Stock markets plummeted Thursday after Russia invaded Ukraine, causing global energy prices to surge and equity markets to plunge, multiple sources reported.
The Dow Jones Industrial Average dropped over 800 points, or 2.4%, at the beginning of Thursday’s trading session, CNBC reported. The key index sits Thursday over 11% off its record high. Meanwhile, the S&P 500 fell nearly 2.5% early Thursday, bringing the index closer to correction territory. The basket of 500 large companies in the U.S. closed Wednesday 12% off its record high.
Nasdaq futures declined 3% Thursday, bringing the index closer to bear market territory, CNBC reported. The index is down roughly 20% from its high after Wednesday’s close.
Russia launched an attack on Ukraine early Thursday, with reports emerging of explosions and missile strikes throughout the country, including near the capital, Kyiv. Thursday’s invasion placed further pressure on the global economy, which has already been hit by supply chain issues and soaring inflation.
Russia’s invasion “is really worse than a baseline expectation that we had or the market had,” Binkly Chadha, chief U.S. equity and global strategist at Deutsche Bank, said on CNBC. “I would argue we are talking basically another 5% to 6% down, which would put us close to 20% or bear market territory.”
The global price of crude oil skyrocketed to over $100 per barrel for the first time since 2014 after Russia launched its invasion, the Daily Caller News Foundation reported. The Brent crude index, the global oil benchmark, reached $101.66 Thursday morning, marking a 4% increase overnight, the DCNF reported, and the U.S. WTI index surged almost 7% to $98.69 on Thursday, its highest level since 2014.
“The worst-case scenario of Russia invading Ukraine beyond the separatist regions is a shock to the equity and oil markets,” Kathy Bostjancic, chief U.S. economist at Oxford Economics, told CNBC. “The fallout could have sizeable negative impact on the European economy which would then dampen US activity modestly,”Bostjancic said, adding that she still expected the Fed to hike interest rates in March.
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