Dow sheds almost 600 points, U.S. stocks end sharply lower as Russia says it will begin attacks on Kyiv

What drove markets?

Shares sank after Russia on Tuesday stepped up its shelling of Kharkiv, Ukraine’s second-largest metropolis. There wasn’t any tangible progress made in cease-fire talks between Russia and Ukraine held close to the Ukrainian border with Belarus on Monday, although the 2 sides agreed to maintain speaking.

“Clearly the Russia-Ukraine state of affairs is the first driver of the markets,” with traders shopping for U.S. Treasurys in “a flight to security,” stated Randy Frederick, managing director of buying and selling and derivatives at Charles Schwab, in a telephone interview Tuesday. When costs of Treasurys rise, yields fall. 

The yield on the 10-year Treasury word BX:TMUBMUSD10Y fell 12.8 foundation factors Tuesday to 1.708%. That compares with round 2% forward of the invasion.

“Financials are getting pounded as a result of the 10-year is down sharply at this time,” Frederick stated of its yield, including that monetary corporations are likely to do effectively in a rising price atmosphere. “That’s dragging down the Dow.”

American Specific Co.
AXP
led the Dow’s decline Tuesday with an 8.5% drop whereas JPMorgan Chase & Co.
JPM
closed about 3.8% decrease and Goldman Sachs Group Inc.
GS
fell 3.3%, in keeping with FactSet knowledge.

Frederick stated he prefers wanting on the efficiency of the S&P 500 index, because it’s a broader illustration of the U.S. inventory market. Financials had been the worst-performing of the S&P 500’s 11 sectors on Tuesday, ending down 3.7%, FactSet knowledge present. Vitality was the only real sector with features, closing 1% increased.

In the meantime, satellite tv for pc pictures confirmed a 40-mile convoy of Russian tanks and different army autos advancing on Kyiv, the capital of Ukraine. Russia’s Protection Ministry stated it could start strikes towards Ukrainian intelligence and knowledge services in Kyiv, warning residents dwelling close by to go away their houses, The Wall Road Journal reported.

“Traders concern that Russia has gone too far to blink first,” stated Fawad Razaqzada, analyst at ThinkMarkets, in a word.

“Should you ever puzzled how headline-driven markets regarded like, effectively that is it. After staging a formidable restoration on Monday to shut the weekend gaps, the key indices have began the brand new month on the again foot as soon as once more. That is hardy stunning given Ukrainian state of affairs and the influence sanctions on Russia is having on the broader world markets,” he stated, noting some European banks have massive publicity to Russian lenders.

Oil costs soared and remained sharply increased regardless of an settlement by member international locations of the Worldwide Vitality Company, together with the U.S., to launch 60 million barrels of crude from strategic reserves. West Texas Intermediate crude for April supply
CLJ22
surged 8% to shut at $103.41 a barrel on the New York Mercantile Alternate, the very best settlement for a front-month contract since July 22, 2014, in keeping with Dow Jones Market Knowledge.

See: Oil surges, however historical past says costs finally fall after international locations launch emergency reserves

In U.S. financial knowledge launched Tuesday, the Institute for Provide Administration stated its manufacturing index rose to 58.6% in February, up from a 14-month low of 57.6% a month earlier. Economists polled by The Wall Road Journal forecast the index to rise to 58%. Any quantity above 50% signifies progress. 

“The manufacturing sector stays on a solidly expansionary footing regardless of tight inventories, rising prices, supply-chain challenges and a tricky hiring atmosphere. Demand stays robust,” stated Jim Baird, chief funding officer at Plante Moran Monetary Advisors.

Which corporations had been in focus?

• Shares of Goal Corp.
  TGT
  soared 9.8% after the retailer delivered better-than-expected fourth-quarter revenue and provided upbeat steerage, offsetting a income miss.

• Zoom Video Communications Inc.
  ZM
  warned of a giant slowdown in gross sales progress this yr and stated it could spend massive for futures alternatives, whereas additionally saying a plan to repurchase $1 billion in inventory. Zoom’s shares dropped 7.4%.

• Shares of Workday Inc.
  WDAY
  rose 4.9% after the human-resources cloud-software firm topped estimates for the quarter and forecast a subscription income vary that exceeded the Wall Road consensus.

• HP Inc.
  HPQ
  late Monday reported a steep enhance in private pc gross sales and total income, whereas providing robust steerage for its fiscal yr. Shares fell 0.8%.

How did different property fare?

• The ICE U.S. Greenback Index
  DXY
  rose 0.7%.

• Gold futures
  GC00
  for April supply
  GCJ22
  rose 2.3% to settle at $1,934.80 an oz. That’s the very best most-active contract end since January 2021, in keeping with FactSet knowledge.

• Bitcoin
  BTCUSD
  was up about 6.2% at round $44,214.

• The Stoxx Europe 600
  XX:SXXP
  closed 2.4% decrease, whereas London’s FTSE 100
  UK:UKX
  fell 1.7%.

• Equities rose in Asia, with the Shanghai Composite
  CN:SHCOMP
  ending 0.8% increased, whereas the Cling Seng Index
  HK:HSI
  edged up 0.2% in Hong Kong and Japan’s Nikkei 225
  JP:NIK
  rose 1.2%.

—Steve Goldstein contributed to this text.