[New York Stock Market] Sharp Decline Amid Russian Encirclement Attack... Oil Prices Surge 8%

[Image source=Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] As Russian forces attempted encirclement attacks on Kyiv, the capital of Ukraine, the New York stock market sharply declined on the 1st (local time). International oil prices surpassed $100 per barrel, reaching their highest level since 2014, further intensifying investors' inflation concerns.

On this day, the Dow Jones Industrial Average closed at 33,294.95, down 597.65 points (1.76%) from the previous session. The S&P 500, centered on large-cap stocks, fell 67.68 points (1.55%) to 4,306.26, and the tech-heavy Nasdaq dropped 218.94 points (1.59%) to close at 13,532.46.

Investors continued to monitor geopolitical risks between Russia and Ukraine. Satellite images captured Russian troops heading toward Kyiv, and news of bombings at the Kyiv TV tower and civilian residential areas in Kharkiv, Ukraine's second-largest city, followed, highlighting risk-averse sentiment in the market. Additionally, attention was focused on the potential impact of economic sanctions against Russia by the West, including the United States.

Among individual stocks, financial shares led the decline. Bank of America (BoA) closed down 3.91% from the previous session. Wells Fargo and Charles Schwab slid more than 5% and 6%, respectively. Major foreign media reported that most U.S. banks are not directly exposed to the economic sanctions against Russia but are closely monitoring the situation.

Technology stocks also weakened. Nvidia fell 3.75%, Apple dropped 1.05%, and Tesla, a leading tech stock, declined 0.75%. Microsoft (-1.15%), Meta Platforms (-3.56%), and Amazon.com (-1.58%) also showed downward trends. In contrast, large retailer Target surged more than 11% after releasing earnings that far exceeded market expectations.

In the bond market, the yield on the U.S. 10-year Treasury note fell to around 1.72%. A decline in Treasury yields indicates a rise in prices of these safe-haven assets. Gold, another representative safe asset, rose 2.56% from the previous session to $1,949 per ounce. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's "fear gauge," jumped over 11% to reach the 33 level.

Geopolitical risks drove international oil prices sharply higher. On the New York Mercantile Exchange, April West Texas Intermediate (WTI) crude oil closed at $103.41 per barrel, up about $7.69 (8%) from the previous session. This closing price is the highest since July 22, 2014.

During the session, WTI briefly reached $106.78 per barrel, the highest level since June 2014. Brent crude, the international oil price benchmark, also traded around $107 per barrel, marking its highest level since July 2014.

As Western countries increased the severity of sanctions against Russia, concerns arose that commodity trading itself could become difficult. Additionally, reports that Russian forces are deploying large tank units toward Kyiv added upward pressure on oil prices. Russia is the world's third-largest oil producer.

The United States, South Korea, and 31 member countries of the International Energy Agency (IEA) decided in a video conference on this day to release 60 million barrels from emergency reserves. However, oil prices continued to rise even after this announcement. Bob Yager, director at Mizuho Securities, commented that 60 million barrels represent only six days of Russia's production and twelve days of its exports, calling it "not that much."

Some point out that this rise in commodity prices is further fueling inflation concerns in the United States. Jerome Powell, Chair of the U.S. Federal Reserve, is scheduled to attend a semiannual hearing before the House Financial Services Committee on the 2nd.

This content was produced with the assistance of AI translation services.