Oil prices soared on Tuesday and investors shifted more money into ultra-safe US government bonds as Russia stepped up its war on Ukraine.
Stocks fell following a volatile day for major indexes as investors tried to measure how the conflict will impact the global economy. The S&P 500 index fell 0.7 percent as of 10:14 am Eastern. The Dow Jones Industrial Average fell 337 points, or 1 percent, to 33,554 and the Nasdaq fell 0.5 percent.
Oil has been a key concern because Russia is one of the world’s largest energy producers. The latest bump in prices increases pressure on persistently high inflation that threatens households around the world. US benchmark crude oil prices rose 6.6 percent to USD 101.87 per barrel, reaching the highest price since 2014. Brent crude, the international standard, rose 6.6 percent to USD 104.44.
The US and its allies have been putting significant pressure on Russia’s financial system as that nation continues its push into Ukraine and its key cities.
The value of the Russian ruble plunged to a record low Monday after Western countries moved to block some Russian banks from a key global payments system. Also Monday, the US Treasury Department announced more sanctions against Russia’s central bank.
Various companies have announced plans to scale back or pull out from ventures in Russia, or to suspend operations in Ukraine due to the conflict.
The Russian central bank has also raised its key rate to 20 percent from 9.5 percent in a desperate attempt to shore up the plummeting ruble and prevent a run on banks. Russia’s stock market remained closed on Tuesday.