US stocks fell overnight, in correction territory as higher oil prices deepened inflation concern

US stock futures It was mixed but choppy overnight as the Dow Jones Industrial Average fell nearly 800 points on Monday to close in a correction as higher oil prices deepened concerns about inflation and economic growth.

The rise in oil prices beyond $130 a barrel on Monday was due to the possibility that the United States will block imports of crude oil from Russia. Oil prices stabilized later in the day and rose moderately early Tuesday.

The third round of peace talks between Ukraine and Russia failed to produce significant results. A senior Ukrainian official said there had been little, unspecified progress toward creating safe corridors to allow civilians to flee the fighting.

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But Russian forces continued to bombard them, as food, water, heat and medicine became increasingly scarce in Ukraine.

The surge in the prices of oil and other vital commodities is shaking global markets and the situation remains uncertain as investors look for safe havens from expanding sanctions against Russia.

Analysts expect the war in Ukraine to be high on the agenda for some time, and say the full impact of the conflict has yet to be fully taken into account.

“Disruptions in energy markets and the potential for a shift in the geopolitical paradigm are leading to a highly unpredictable environment,” Stephen Innes of SBI Asset Management said in a comment. But he added, “We have to get to a point where the stock price starts to have a light at the end of the tunnel.”

On Monday on Wall Street, the S&P 500 Index fell 122.78 points to 4,201.09. The Dow Jones Industrial Average fell 2.4% to 32817.38.

The tech-heavy Nasdaq Composite fell 3.6% to 12830.96 and is now 20.1% below the record set in November. This means that the index is in what Wall Street calls a bear market. The S&P 500 is down 12.4% from its peak in early January.

Gold – a gauge of Wall Street stress – also rose, but not as much when oil prices peaked. The price of gold briefly touched $2,007.50 an ounce. By Tuesday afternoon, it was at $1,995.88, down 0.1%.

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US benchmark crude advanced $2.67 to $122.07 a barrel in electronic trading on the New York Mercantile Exchange. It settled at $119.40 a barrel on Monday, up 3.2% after earlier touching $130.50. Brent crude, the international pricing standard, rose $3.75 to $126.96 a barrel. It had settled at $123.21 a barrel, up 4.3%, after earlier exceeding $139.

Concerns are growing that a Russian invasion of Ukraine will upset already limited oil supplies. Russia is one of the world’s largest energy producers, and oil prices were already high before the attack as the global economy demands more fuel after the coronavirus shutdown.

A US ban on imports of Russian oil and other energy products, if taken, would be a big step for the US government, although the White House said it hoped to limit disruptions in oil markets and curb price hikes at the gasoline pump.

It has also been reported that US officials may consider easing sanctions against Venezuela. This could free up more crude oil and ease concerns about lower supplies from Russia. (Courtney Crowe/NYSE via AP)

It has also been reported that US officials may consider easing sanctions against Venezuela. This could free up more crude oil and ease concerns about lower supplies from Russia.

The average gallon already costs an average of $4,065 nationwide after breaching the $4 barrier Sunday for the first time since 2008. A month ago, the average gallon was $3,441, according to the AAA.

The war is putting additional pressure on central banks around the world, with the US Federal Reserve raising interest rates later this month for the first time since 2018. Higher rates are slowing the economy, which we hope will help rein in high inflation. . But if the Fed raises interest rates too quickly, it risks pushing the economy into recession.

“Their reaction to geopolitics is really not quantifiable, so there is uncertainty around that,” said Samir Samana, senior global market analyst at Wells Fargo Investment Institute.

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In addition to the sanctions that governments have imposed on Russia for its invasion of Ukraine, companies also impose their own. The list of companies leaving Russia has grown to include Mastercard, Visa and American Express, as well as Netflix.

On Wall Street, Bed Bath & Beyond shares rose 34.2% to $21.71 after billionaire Ryan Cohen acquired nearly 10% of the company’s shares and recommended big changes. Cohen is the co-founder of Chewy, and he amassed some of the following cult after taking a stake in GameStop, the struggling video game series that eventually appointed him chairman of the board.

Meanwhile, shares in Asia fell on Tuesday.

Benchmarks in Tokyo, Sydney, Hong Kong, Seoul and Shanghai fell after a 3% drop for the S&P 500.

Japan’s benchmark Nikkei 225 index was down 1.7% in afternoon trading, to 24,783.70. Australia’s S&P/ASX 200 fell 0.8% to 6,980.30. South Korea’s Kospi index fell 0.8 percent to 2,631.49. Hong Kong’s Hang Seng lost 0.5% to 20,956.39, while the Shanghai Composite fell 1.2% to 3,333.49.

Treasury yields rose, with the 10-year gain rising to 1.78% from 1.72% late Friday.

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In currency trading, the US dollar rose to 115.48 Japanese yen from 115.32 yen. The euro traded at $1.0865, up from $1.0853.

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AP Business Business Writers Stan Choi and Alex Vega contributed.