Stocks fall, oil tops $100 a barrel as Ukraine war rages

Oil prices soared and investors shifted more money out of stocks and into ultra-safe U.S. Government bonds as Russia stepped up its war on Ukraine

Oil prices soared and stocks fell on Wall Street on Tuesday as investors shifted more money into ultra-safe U.S. Government bonds in response to Russia’s escalating war on Ukraine.

Another day of volatile trading left stocks broadly lower as investors tried to measure how the conflict will impact the global economy. The S&P 500 index fell 1.5%. The Dow Jones Industrial Average fell 1.8% and the Nasdaq composite slid 1.6%. The declines add to the market’s losses after a two-month skid for the S&P 500.

The bigger moves came from the markets for oil, agricultural commodities and Government bonds. 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.

U.S. benchmark crude oil jumped 8% to $103.41 per barrel. That’s the biggest single-day jump since May 2020 and the highest price since 2014. Brent crude, the international standard, surged 7.1% to $104.97.

The crisis in Ukraine prompted an extraordinary meeting of the International Energy Agency’s board, which resulted in all 31 member countries agreeing to release 60 million barrels of oil from their strategic reserves.

Russia’s invasion of Ukraine has also put more pressure on agricultural commodity prices, which were also already getting pushed higher with rising inflation. Wheat and corn prices rose more than 5% per bushel and are already up more than 20% so far this year. Ukraine is a key exporter of both crops.

“A whole confluence of factors are impacting markets,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “We see that manifesting not only in (stock) markets right now, which certainly have been more volatile over the course of the past two weeks since the invasion of Ukraine, but we’re also seeing it now across the rates complex as well as the commodities complex.”