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Dow futures drop more than 400 points as tensions between Russia and Ukraine brew


Traders in New York City work at the New York Stock Exchange (NYSE), New York City, U.S.A, February 15, 2022.

Brendan McDermid | Reuters

On Monday evening, stocks futures dropped sharply as traders continued to watch the growing tensions between Russia & Ukraine.

Futures linked to the Dow Jones Industrial Average fell by 454 points or 1.3%. S&P 500 futures slid 1.7%, and Nasdaq 100 futures were off by 2.4%.

Russian President Vladimir Putin declared Monday that Russia would recognize two independent regions within Ukraine. potentially undercutting peace talks with President Joe Biden. The announcement was followed up by this news Biden was set to order sanctions on separatist regions of UkraineThe European Union has also pledged to adopt additional measures.

Putin sent forces to the breakaway areas later.

This news broke after Sunday’s White House statement. Biden has accepted “in principle”Putin to discuss further diplomatic efforts to ease tensions between Russia and Ukraine. Jen Psaki, White House Press Secretary, stated that the summit would take place after the meeting between Sergey Lavrov and Antony Blinken, Secretary of State.

Recent market volatility has been caused by the Russia-Ukraine war. Major averages have posted back-to-back losses every week. The Dow fell 1.9% last week, and the S&P 500 and Nasdaq Composite slid 1.6% and 1.8%, respectively.

The Federal Reserve is also being watched closely by traders, who are expecting the central bank to increase rates several times beginning next month. According to the CME Group’s FedWatch toolTraders bet that there will be a 100% chance for a Fed rate increase after March 15-16.

Stocks have been under pressure from tighter monetary policies, especially in tech-sensitive areas. This has caused the Treasury yield to rise sharply for 2022. After briefly surpassing 2%, the benchmark 10-year Treasury yield was last week at 1.93%. At 1.51%, the benchmark 10-year Treasury yield began trading in 2022.

Ryan Grabinski, Strategas’ investment strategist and strategist for Strategas wrote that “all eyes are on Fed” in Friday night’s note. According to the Strategas investment strategist Ryan Grabinski, “The market anticipates that the Fed will raise interest rates at every Fed meeting this year.” We leave Monetary Policy as Favorable, despite the fact that the Fed continues to purchase Treasuries (an accommodating policy action).

Wall Street has been busy preparing for this week’s tail-end corporate earnings season. Home Depot and eBay are among those expected to report. It has been a solid earnings season thus far: Of the more than 400 S&P 500 companies that have posted fourth-quarter earnings, 77.7% have beaten analyst expectations, according to FactSet.

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