U.S. markets opened sharply lower Thursday, following a global plunge in stocks and a more than $7 surge in oil prices after Russian President Vladimir Putin launched military action in Ukraine, prompting Washington and Europe to vow sanctions on Moscow that could roil the global economy.
The Dow tumbled 830 points Thursday morning as investors continue to pull back amid concerns a prolonged conflict could push up energy prices, add to inflationary pressures and slow economic growth around the globe. The S&P 500 dropped 2.5%, bringing the benchmark U.S. stock index deeper into a market correction, and the tech-heavy Nasdaq composite sank about 1.5%.
The price plunges eased somewhat by 11:30 a.m. ET, with the Dow down about 600 points, or 1.8%, to 32,539. The S&P 500 was off about 1% and the Nasdaq was down just 0.1%.
Bitcoin prices keep falling
Meanwhile, the price of major cryptocurrencies continued their slump this week as the Russia-Ukraine crisis has boiled over and crypto buyers and other investors sought safer havens like the U.S. dollar and gold.
Bitcoin fell to $36,067 on Thursday, a 4% drop, after being as high as $44,125 only a week ago. Ethereum is down 6% to $2,464 and solana is down 5% to $85.34.
Asia-Pacific stocks sold off, too, with markets in Hong Kong and Sydney down 3%, while Tokyo and Seoul fell 2%. European equities markets dropped 2.5% to 4%, and Russia’s main stock market was off more than 35% Thursday, with the MOEX index shedding more than $150 billion in value, according to Bloomberg.
The Ukraine attack began moments after Russian President Vladimir Putin announced that he had “decided to conduct a special military operation” to protect eastern Ukraine’s Donbas region. CBS News correspondents reported hearing loud blasts in the capital city, Kyiv, and in the eastern city of Kharkiv.
A Ukrainian government spokesperson said early Thursday that “cruise and ballistic missile strikes are underway at the control centers” in Kyiv.
U.S. gas prices to rise
Oil prices jumped 7.5%, topping more than $100 a barrel for the first time since 2014, on concerns that the crisis in Eastern Europe could disrupt Russian supplies of crude. Russia accounts for about 12% of the world’s oil supply and provides about 40% of gas to the European Union. Most of that fuel is delivered through pipelines, including in Ukraine, according to Eurasia Group.
President Biden on Tuesday announced sanctions against Russia after Russian President Vladimir Putin sent military forces into Ukraine’s eastern breakaway regions. Experts now predict the U.S. and EU will respond to the latest hostilities with stiffer economic sanctions, potentially inviting Russia to respond with its own measures.
“The attack and sanctions response will have far-reaching impacts on the global economy,” analysts with political risk consulting firm Eurasia Group said in a report. “Oil and gas prices will rise significantly, reinforcing inflationary pressures and weighing on financial markets and global growth.”
Although the U.S. is not dependent on Russian energy, rising global oil costs since late 2021 have driven up prices at the pump for Americans. The national average for a gallon of gas is now $3.53 — 21 cents more than in January and 90 cents more than a year ago, according to AAA. The highest ever price for a gallon of regular gas in the U.S. was $4.11 in July of 2008.
“Russia is one of the leading oil producers globally, behind only the United States and Saudi Arabia,” AAA spokesperson Andrew Gross said in a report. “And if they choose to withhold their oil from the global market, such a move would eventually be reflected in higher gas prices for American drivers.”
The S&P 500 fell 1.8% to an eight-month low on Wednesday and is now in “correction” territory, a loss of at least 10% from its recent peak, while the Dow and Nasdaq also finished lower. U.S. stocks have slumped this year on expectations by investors that the Federal Reserve is set to start hiking interest rates as early as next month in a bid to curb inflation.
— The Associated Press and Reuters contributed to this report.
