(New York) The New York Stock Exchange ended a highly volatile session on Monday, marked by concerns about the Russian-Western crisis around Ukraine and apprehension of future Fed rate hikes.
Updated yesterday at 4:52 p.m.
The Dow Jones fell 0.49% to 34,566.17 points, registering its third negative session in a row. The tech-heavy NASDAQ index ended in equilibrium at 13,790.92 points. And the broader S&P 500 index dropped 0.38% to 4401.67 points, according to final results at the close.
Indices struggled to find direction, with the Dow Jones losing up to 1% in session, ‘amid geopolitical concerns between the US warning of an imminent Russian invasion of Ukraine and Russia’s minister of Foreign Affairs, Sergei Lavrov, who suggests that diplomacy is still on the table,” Schwab analysts explained.
At the same time on Monday, the United States announced its decision to move its embassy in Ukraine from Kiev to Lviv, in the west of the country, in the face of the “dramatic acceleration” of the deployment of Russian forces on the border.
For his part, the Russian ambassador to the European Union, Vladimir Tchijov, affirmed in an interview with the Guardian that Russia “will not invade Ukraine unless we provoke (it)”.
For Kathy Lien of the Daily FX site, investors “remain skeptical about the possibility of an agreement, the risk of conflict remaining very high, hence the behavior of the shares”.
The euro also suffered from these geopolitical concerns, with investors rushing to safe havens such as the dollar, the yen or the Swiss franc.
Around 3 p.m., the euro fell 0.44% to 1.1300 dollars per euro, its lowest level for eleven days.
The prospect of a rate hike by the US central bank (Fed) was also on the minds of investors.
Shortly before the opening of Wall Street, a member of the Fed reiterated his remarks saying that rates should be raised by one percentage point before the beginning of July, a tougher turn of the screw than envisaged so far.
It is “the credibility of the Fed” to face “accelerating inflation”, argued James Bullard, president of the Fed of Saint-Louis on the CNBC channel.
US Treasury bond yields rose after the comments. That on the ten-year debt rose to 1.99%, instead of 1.93% on Friday. The yield on two-year debt jumped to 1.58% from 1.49%.
Between Ukraine and the fear that the Fed will accelerate its rate hikes next month, “equities are moving at the confluence of headwinds”, summed up analysts at Wells Fargo.
In the absence of major economic indicators, nine of the eleven S&P 500 sectors ended in the red, starting with energy (-2.24%) and banks (-1.11%).
Lockheed Martin fell 2.37% to $386.82, after abandoning a takeover of Aerojet Rocketdyne in the face of opposition from the US competition regulator. Aerojet dropped 5.60% to $36.89.
The American group 3m, which notably produces Scotch tape, Post-its and above all respiratory protection masks, disappointed analysts by forecasting slower sales growth in 2022. The group expects to sell fewer masks against the COVID-19 this year. The title dropped 0.99% to 157.96 dollars.
Shares of Splunk, a cloud data analytics group, soared 9.13% to $124.97 on news reports that telecoms giant Cisco had made a takeover bid.
Cisco shares fell 1.34% to $53.18.
Manufacturers of COVID-19 vaccines have suffered in the wake of a mistrust of so-called growth stocks, which are riskier for investors.
Moderna lost 11.68% to $142.47, Pfizer dropped 1.93% to $49.80 and Novavax plunged 11.42% to $80.11.