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Tensions Over Ukraine Cause Us Stocks to Fall and Oil Prices to Rising

Following the White House’s call for U.S. citizens to leave Ukraine immediately, stocks in the United States plummeted and oil prices jumped on Friday. According to the White House, “the possibility of Russia’s invasion of Ukraine is rising.”

Following a press conference given by US National Security Advisor Jake Sullivan, who stated that a Russian strike on Ukraine “may happen at any time,” including during the current Winter Olympic Games in Beijing, the markets responded negatively.

The Standard & Poor’s 500 indexes fell by 1.5 percent to 4438.89 points, while the price of West Texas Intermediate (WTI) oil increased by over 4 percent to $93.48 a barrel, according to Reuters.

Lockheed Martin and Northrop Grumman both saw their stock prices rise by 2.8 percent and 4.1 percent, respectively, as the arms industry gained traction.

Following diplomatic efforts, investors’ concerns about an alleged impending Russian invasion of Ukraine have begun to subside in recent days.

Meanwhile, Gold Prices Rose to a Two-week High of $1858 an Ounce, Setting a New Record.

Because of the United States’ warning that Russia could launch offensive military action against Ukraine as soon as next week, stocks fell and investors fled to government bonds for safety.

As tensions with Russia escalate, risk assets saw their weekly losses increase as the United Kingdom and the United States advised citizens to leave Ukraine. Oil prices rose as a result of fears that a Russian attack would result in harsh U.S. sanctions. Russia has categorically denied allegations that it is planning an invasion of Ukraine.

Following steep declines on Thursday, the S& P 500 fell 1.9 percent and the Nasdaq 100 fell more than 3 percent, as investors bet on faster Federal Reserve tightening began to pay off. Treasury bonds attracted bids, with the yield on the 10-year note falling 11 basis points to approximately 1.92 percent. With Brent crude reaching $95 a barrel for the first time since 2014, oil prices have climbed.

Us Stocks to Fall and Oil Prices

For months, the United States has been warning European allies that Russia may be preparing to invade Ukraine, massing nearly 130,000 troops near the border and staging the largest joint military drills in years in neighboring Belarus, which has raised the possibility of an invasion.

The United States has threatened Russia with crippling economic sanctions if it launches a strike, while the Kremlin has stated that NATO expansion farther east and the deployment of weapons in Ukraine are red lines.

It is possible that a Russian invasion of Ukraine would not only disrupt crude supplies, but it could also result in retaliatory sanctions from the United States. Recent increases in oil prices have been driven by speculation that demand will outstrip supply as the global economy recovers from the pandemic.

Cliff Hodge, chief investment officer at Cornerstone Wealth, wrote in a note that the news about Russia and Ukraine was “another body-blow to markets, which were already reeling from stubborn inflation numbers and uber hawkish comments from Fed officials.” “Because of the reaction of the markets to recent headlines, we could see more downside risk in the coming weeks.”

After a strong inflation reading and comments from a Federal Reserve official sparked a selloff in equities and bonds the day before, stocks and bonds continued to fall Friday. With the likelihood of a rate increase increasing faster, some traders are betting that a raise could occur even before the next regularly scheduled meeting in March.

Those concerns were completely allayed on Friday when the Federal Reserve said that it would proceed with the final of its bond purchases before the program’s expiration next month. The central bank has stated that it will not raise interest rates until after the buying is completed.

Concerns about inflation weighed on consumer morale in the United States, which fell further in early February to a new decade low as attitudes toward personal finances deteriorated. The University of Michigan’s sentiment index fell to 61.7 in January, the lowest level since October 2011.

Tensions Over Ukraine Cause Us Stocks to Fall and Oil Prices to Rising.

This is the lowest level since October 2011. Consumers anticipate an inflation rate of 5 percent over the next year, an increase from the previous month’s figure of 4.9 percent, and the highest rate is seen since 2008.

According to Sam Stovall, chief financial analyst at CFRA Research, “investors are concerned that the economy is slowing at the worst possible time, just as the Fed is preparing to raise interest rates, which might endanger the health of this boom and bull market.” “Add to that the geopolitical tensions, and I believe there are very valid reasons why we are experiencing the volatility that we are experiencing.”

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