Oil prices soared and investors shifted more money out of stocks and into ultra-safe US government bonds Tuesday as Russia stepped up its war on Ukraine. The price of oil surged back above $100 a barrel to its highest level since 2014 after Russia, a major energy producer, faced further isolation and economic damage because of its invasion of Ukraine, the AP reports. The S&P 500 fell 67.68 points, or 1.5%, to 4,306.26. The Dow Jones Industrial Average fell 597.65 points, or 1.8%, to 33,294.95. The Nasdaq fell 218.94 points, or 1.6%, to 13,532.46. The Russell 2000 index of smaller companies fell 39.58 points, or 1.9%, to 2,008.51.
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. US benchmark crude oil jumped 8% to $103.41 per barrel, reaching 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. The rush into bonds pushed the yield on the 10-year Treasury back down to 1.73%, where it was in January. In February, it had crossed back above 2% for the first time in over two years. Several stocks made big moves on earnings. Target jumped 9.9% after reporting strong fourth-quarter financial results and saying it will invest up to $5 billion this year in physical stores, remodels and other initiatives. Workday rose 4.9% after reporting encouraging earnings.
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