The Dow Jones Industrial Average dropped by more than 1.75%, the S&P 500 shed more than 2.1% and the Nasdaq dropped nearly 2.9%
US stocks tumbled Thursday after tensions in Ukraine flared, with Russia’s apparent saber-rattling also rattling investors as the Dow Jones Industrial Average logged its biggest percentage drop of the year.
The Dow Jones Industrial Average dropped by more than 1.75% — its biggest daily percentage drop since November — shedding some 622 points while the S&P 500 shed more than 2.1%.
The Nasdaq dropped nearly 2.9% on Thursday. Tech stocks were among the biggest losers as Microsoft shares declined 2.9% and Alphabet Inc. fell by more than 3.75%.
Bond yields also dropped as investors rushed to their perceived safety. The yield on the 10-year Treasury dropped to 1.96% from 2.04% late Wednesday.
The markets reacted to the renewed prospect of a Russian invasion of Ukraine.
President Biden said Thursday that he expected a Russian military incursion into its neighbour within days.
A Russian invasion could lead to a disruption in the oil markets. Russia is a major global producer of crude oil, and investors fear that a war would further hamstring an already tightly supplied market. Still, oil was down about 2% on Thursday even with worries over Russian supply.
Even before geopolitical tensions ratcheted up in Eastern Europe, investors were bracing for stringent monetary action from the Federal Reserve.
The US central bank had indicated that it would move to tame spiralling inflation by raising interest rates several times this year.
Last week, the Department of Labor reported that inflation rose to its highest rate in 40 years in January. Consumer prices surged 7.5% in the 12-month period that started in January 2021 — the highest annual increase since February 1982.
Increases in the cost of food, electricity and rent were among the largest contributors to the red-hot rate, the Labor Department said.