The S&P 500 fell for a fourth straight session Wednesday, sliding deeper into correction territory, as Russia-Ukraine tensions escalate.
The S&P 500 fell 1.2%, after closing more than 10% from its Jan. 3 record close on Tuesday. The Dow Jones Industrial Average dropped about 300 points or 0.9%. The Dow is headed for its fifth day of losses. The technology-focused Nasdaq Composite was off by about 1.7%.
“Stocks are going to struggle to find direction until financial markets have a clear answer on whether the Russia-Ukraine crisis will have a diplomatic solution or regional warfare,” said Edward Moya, senior market analyst with OAND.
Stocks moved broadly lower with reopening plays like airlines and cruiselines in the red, as well as some technology names. Delta Air Lines lost nearly 2%, and Tesla was off by 4%. E-commerce giant Amazon fell more than 2%.
Investors have been juggling brewing tensions between Russia and Ukraine. The Ukraine Ministry of Digital Transformation said Wednesday there was another mass DDoS [denial of service] attack on Wednesday that prevented certain entities from accessing government websites, NBC reported.
Ukraine also warned its citizens against traveling to Russia and to leave the neighboring country, if they are there. Meanwhile, the UK warned that it was ready to impose more sanctions on Russia.
On Wednesday the Biden administration announced it will allow sanctions to move forward on the company in charge of building Russia’s Nord Stream 2 gas pipeline, following a first tranche of sanctions against Russia Tuesday that targets Russian banks, the country’s sovereign debt and three individuals.
“Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers,” Biden said in a statement Wednesday. “These steps are another piece of our initial tranche of sanctions in response to Russia’s actions in Ukraine.”
The VanEck Russia ETF, a U.S.-traded security which invests in top Russian companies, dropped more than 7% on Wednesday.
“While uncertainties remain, our work shows that historically military/crisis events tend to inject volatility into markets and often cause a short-term dip, but stocks tend to eventually rebound unless the event pushes the economy into recession,” Eylem Senyuz, senior global macro strategist at Truist, wrote in a note to clients.
“Investor sentiment also suggests the bar for positive surprises is low,” Senyuz added.
Investors are also facing concerns about record inflation and the Federal Reserve’s monetary policy pivot which could result is rate hikes as soon as next month.
Wall Street is betting that there’s a 100% chance of a rate hike at the Federal Reserve’s March meeting, according to the CME Group’s FedWatch tool.
On Tuesday the Dow fell more than 480 points. The S&P 500 shed 1.01%, and ended the session 10.25% below its Jan. 3 record close, putting the broad market index in correction territory. The Nasdaq Composite declined 1.23% for its fourth straight negative session.