Wall Street losses rose on Wednesday as world leaders waited to see if Russian President Vladimir Putin ordered troops deeper into Ukraine.
The S&P 500 fell 1.8% to an 8-month low, deepening the benchmark’s “correction” to a 10% loss from its recent high. More than 85% of S&P 500 stocks fell as technology companies weighed on the market. index the most.
The tech-heavy Nasdaq fell 2.6%, dragged down by steep losses from Apple and Microsoft. The Dow Jones Industrial Average fell 1.4%.
US Treasury yields rose slightly, as did gold prices.
Wall Street has been watching developments in Ukraine closely, where Russia has been amassing troops for a potential new invasion. Russia has started to evacuate its embassy in Kyiv. He has already sent soldiers to the eastern regions of Ukraine after recognizing the independence of some rebel-held areas.
The United States and Western countries responded with sanctions, and Germany withdrew a document needed to certify Russia’s Nord Stream 2 gas pipeline.
Energy prices have been volatile – Russia is the world’s largest natural gas producer and the third largest oil producer and a military conflict could threaten supplies.
Geopolitical tensions added to investor concerns about rising interest rates. The Federal Reserve is expected to raise interest rates at its next policy meeting in March. In anticipation of higher rates, investors had pulled money out of growth sectors such as technology stocks. The Russian-Ukrainian crisis has exacerbated this tendency to abandon riskier assets.
The latest losses added to Tuesday’s slump and the S&P 500’s slide toward a correction. The index saw its last correction in the spring of 2020, as the pandemic upended the global economy. That correction deepened into a bear market — a decline of 20% or more — as the S&P 500 fell nearly 34% in about a month.
“We are clearly, solidly in corrective territory at this point,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “We need some kind of positive news, and there really isn’t much right now.”
The S&P 500 fell 79.26 points to 4,225.50. It is now 11.9% lower than the record level reached on January 3. Shares of some of the largest companies in the index have been hammered by the market slump since the start of the year. Meta, the parent company of Facebook, is down 41.4%, Tesla is down 36.3% and Microsoft is down 16.3%, while Alphabet, the parent company of Apple and Google, is down 12.9%.
Tech stocks led Wednesday’s wide losses. Microsoft and Apple fell 2.6%. The sector has an outsized influence on the S&P 500 due to high valuations of Big Tech companies.
The Dow Jones lost 464.85 points to 33,131.76, while the Nasdaq slipped 344.03 points to 13,037.49. The index is now 18.8% below its peak in November 2021.
Small company stocks also lost ground. The Russell 2000 Index fell 36.08 points, or 1.8%, to 1,944.09.
Retailers and other businesses that rely on direct consumer spending also weighed on the market. Amazon fell 3.6% and Starbucks 3.7%.
US crude oil prices remained volatile, slipping 0.3%, although energy stocks gained ground. Chevron rose 2.4%.
Bond yields rose slightly. The 10-year Treasury yield rose from 1.95% to 1.98% on Tuesday evening.
Wall Street also looks at how companies are handling supply chain issues and higher costs in their latest series of corporate bulletins.
Lowe’s rose 0.2% after raising its profit forecast for the year following a strong financial report in the fourth quarter. Security software maker Palo Alto Networks rose 0.4% after raising its profit forecast on strong cybersecurity demand.
TJX, the parent company of TJ Maxx and Marshalls, fell 4.2% after reporting disappointing fourth-quarter financial results.
Veiga reported from Los Angeles.