Crude oil futures on Tuesday hit their highest levels since 2014 on supply concerns while stocks sold off in a volatile session as investors eyed international responses to Russia recognizing two breakaway regions in Ukraine and sending troops there.
Stocks pared losses sharply and U.S. Treasury yields rose after U.S. President Joe Biden announced the first sanctions against Russia for what he called the beginning of an invasion of Ukraine, and he promised steeper punishments ahead if Russia continued its aggression.
In Toronto, the S&P/TSX composite index finished down 100.38 points, or 0.48%, at 20,907.82.
Health care stocks led declines, sliding 2.8%, while industrials and materials lost 1.2% and 0.9%, respectively.
On Wall Street, the S&P 500 lost 43.94 points, or 1.01%, to end at 4,304.64 points, while the Nasdaq Composite lost 164.31 points, or 1.21%, to 13,383.76. The Dow Jones Industrial Average fell 484.09 points, or 1.42%, to 33,595.09.
The Dow and Nasdaq were each down more than 2% shortly before Biden spoke.
But the safe haven U.S. dollar was slightly lower against major currencies and gold was also in the red.
The European Union also agreed on new sanctions against Russia while German Chancellor Olaf Scholz halted the new Nord Stream 2 gas pipeline from Russia and Britain took action against Russian banks.
“The world is still hoping this is somewhat limited and doesn’t really spread across Europe and Ukraine,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, noting that riskier assets were selling off. “Nobody’s rushing to buy.”
Brent crude futures settled up 1.5% at $96.84 per barrel after earlier topping $99 for the highest level since September 2014, reflecting fears that Russia’s energy exports could be disrupted by any conflict. U.S. West Texas Intermediate (WTI) crude settled up 1.4% at $92.35 per barrel after earlier hitting $96, its highest level since August 2014.
The MSCI world equity index, which tracks shares in 50 countries, shed 0.51% after earlier falling 1.5%, with the index at levels not seen since Jan. 28.
Spot gold was last down 0.4% after earlier climbing to $1,913.89, its highest since June.
U.S. Treasuries were whipsawed around with the reversal of an earlier rally driven by a bid for safe-haven assets as investors took a cautious approach to developments in Ukraine.
Benchmark 10-year notes last fell 6/32 in price to yield 1.9494%, from 1.93% in the previous session. Yields move in the opposite direction to bond prices.
The dollar index fell 0.118%, with the euro up 0.22% to $1.1335. The Japanese yen weakened 0.31% versus the greenback at 115.09 per dollar, while sterling was last trading at $1.359, down 0.06% on the day.
The Russian rouble slid to 80.9275 against the U.S. dollar in earlier trading, touching its lowest level against the greenback since November 2020, before reversing course. The dollar was last down 1.8% against the rouble.
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