By STANCHOE and ALEX VEIGA
New York (AP) — Shares fell on Wall Street on Monday as another big leap in oil prices could weigh on inflationary grips on the global economy.
The S & P 500 fell 2.7% at the largest decline in 16 months after a barrel of US oil soared to $ 130 overnight as the US could ban imports from Russia. Crude oil fell towards $ 120 a barrel, which eased losses, but stocks around the world fell even more sharply earlier in the day, inspired by oil movements.
The Dow Jones Industrial Average fell 716 points (2.1%) to 32,896 at 3:42 EST, and the Nasdaq Composite index fell 3.2%. Equities have been at the worst pace of loss since Russia invaded Ukraine.
There was a lot of tension between gold and Wall Street, but not as much as when oil prices peaked. Gold’s price temporarily touched $ 2,007.50 per ounce, then rose 1.5% to settle at $ 1,995.90.
Oil prices have skyrocketed recently due to concerns that Russia’s invasion of Ukraine may overturn its already tight supply. Oil prices were already high before the attack, as Russia is one of the world’s largest producers of energy and the global economy is demanding more fuel following a coronavirus shutdown.
US House Speaker Nancy Pelosi said in a letter to her colleagues on Sunday that “the House is currently seeking strong legislation” to further isolate Russia for an attack on Ukraine. This could include a ban on Russian oil and energy products, she said.
As the White House said it wanted to limit the turmoil in the oil market, it’s a big step the US government hasn’t yet taken, despite a long list to punish Russia. I want to suppress the price increase of gasoline pumps.
The report also said US authorities may be considering easing sanctions on Venezuela. It could potentially release more crude oil and alleviate concerns about a decline in supply from Russia.
According to AAA, a gallon regular will already cost an average of $ 4.065 nationwide after breaking the $ 4 barrier on Sunday for the first time since 2008. A month ago, the average gallon was $ 3.441.
One barrel of US crude oil settled at $ 119.40, up 3.2% after previously reaching $ 130.50. Brent crude, the international standard, settled at $ 123.21, up 4.3%, after surpassing the previous $ 139.
Recently, markets around the world have been fiercely worried that Russia’s invasion could ignite the already high inflation in the world with high prices for oil, wheat and other commodities produced in the region. It’s shaking. In the United States, consumer prices surged from previous year’s levels last month at the fastest rate in 40 years.
The conflict in Ukraine also threatens the food supply in some regions such as Europe, Africa and Asia, which rely on the vast and fertile farmlands of the Black Sea region known as the “Breadbasket of the World”.
The war has put more pressure on central banks around the world, and the Federal Reserve is moving to raise interest rates later this month for the first time since 2018. We hope that rising interest rates will slow the economy and help curb high inflation. However, if the Fed raises interest rates too much, there is a risk of a recession.
Samir Samana, Senior Global Market Strategist at the Wells Fargo Investment Institute, said:
Some investors see the war in Ukraine as it could facilitate the Fed’s rate hikes. Investors love low interest rates because they tend to push up the prices of stocks and all kinds of markets.
But this time it may not always be the case, Goldman Sachs economists wrote in the report. Sustainable and high inflation threatens to settle in the economy, as prices for oil, wheat and other commodities can rise further. It could upset the Fed’s traditional guidance.
“Decades after economic, financial or political shocks have constantly lowered interest rates, markets may have to relearn that the opposite can also be true,” Gold said. Mansax economist Jan Hazius writes.
Beyond the sanctions imposed on Russia by the government for the invasion of Ukraine, companies are also imposing their own punishments. The list of companies leaving Russia has grown to include Mastercard, Visa, American Express, and Netflix.
The value of the Russian ruble continued to fall under all financial pressure, dropping 12% to 0.7 cents.
Yeap Jun Rong, IG’s market strategist in Singapore, said:
“Economic sanctions do not stop attacks from Russians, but it should now be clear that they serve as a more disciplinary measure at the expense of their impact on the growth of the world economy. Soaring prices could threaten corporate profitability and the outlook for personal consumption. “
On Wall Street, Bed Bath & Beyond’s stake surged after Billionaire’s Ryan Cohen investment company acquired nearly a 10% stake in the company and recommended a major change. After investing in GameStop, a co-founder of Chewy and a struggling video game chain, Cohen attracted some enthusiastic fans and eventually appointed him chairman of the board.
Bed Bath & Beyond’s share price rose 33.6% to $ 21.59.
Treasury yields have risen, rising from 1.72% on Friday to 1.77% in 2010.
Contributed by AP business writers Damian J. Troise and Yuri Kageyama. Veiga reported from Los Angeles.
Wall Street falls after oil prices reach $ 130 per barrel – Daily Local
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