By Yasin Ebrahim

Investing.com – The S&P 500 stumbled Tuesday, as hopes for a diplomatic resolution to deescalate tensions on the Ukraine border soon turned to despair as the U.S. outlined fresh sanctions to deter Russia from carving out further territory in Ukraine.    

It fell 1%.

President Joe Biden stated that “We’re implementing total blocking sanctions to large Russian banks, VEB and their military banks.” These sanctions would cut off Russia’s government from Western financing.

Russian President Vladimir Putin stated that Russia has recognized expanded boundaries of Luhansk, Donetsk. This is after initial indications that Moscow only would recognise the separatist-held regions in Eastern Ukraine.

In sign that diplomacy is running out of road, U.S. Secretary of State Antony Blinken said he would no longer meet with Russian Foreign Minister Sergey Lavrov in Geneva this week. 

A deeper geopolitical crisis caused the market to swing wild. Biden made a brief attempt at a rebound session, but it was quickly met with new selling pressure. 

The market was also affected by consumer discretionary stocks. Home Depot Even though the fourth quarter ended with better than expected results, it was still down over 8%

Home Depot (NYSE) posted fourth-quarter earnings at $3.21, on $35.72 billion in revenue. The results were supported by comparable sales figures of 8.1%.  

The day ended with energy stocks falling 1%, as oil prices fell from their session highs.

Pioneer Natural Resources (NYSE.), APA (NASDAQ.:), and Devon Energy The hardest-hit stocks in the sector of energy were (NYSE:), with the latter falling more than 33%.

Tech, on the other hand, had difficulty holding onto its gains following a positive intraday. 

The stock of big tech, such as Apple (NASDAQ), Amazon(NASDAQ:), Microsoft® (NASDAQ–), Alphabet (“NASDAQ”) and Meta Platforms (NASDAQ–), closed lower. 

The rising Treasury yields have supported financials and banks, with the Federal Reserve reducing the chances of an increase in the Federal Reserve by 50basis points. Although the rate was unchanged, the 2-year Treasury Yield, which is affected by Fed Rate hikes, rose more than 4%.  

Signature Bank (NASDAQ:), First Republic Bank (NYSE:), People’s United Financial Inc (NASDAQ:) were among the biggest gainers. 

About 30% of traders anticipate the Fed raising rates by 50 basis points, down from around 35%.  

The positive economic news that the consumer continues to be in good condition was overshadowed geopolitical developments.  

U.S. consumer sentiment index dropped to 110.5 on February. This was however higher than consensus of 110.0. Jefferies noted that, despite today’s dip in confidence, it remains higher than September (109.8),” Jefferies wrote in a statement. 

Mixed quarterly results were presented by the earnings front.

Kraft Heinz (NASDAQ 🙂 rose 5% against the current trend, after the food- and beverage company increased its long-term growth guidance. It also reiterated its 2022 guidance. 

Krispy Kreme (NASDAQ:) reported its maiden quarterly profit since its initial public offering as price hikes helped offset a rise in costs.

The special purpose acquisitions company is another interesting development. Digital World Acquisition (NASDAQ:), which is taking former President Donald Trump’s social media app Truth Social, surged 10% on data showing the social media app had strong debut on Sunday as it racked up over 170,000 downloads on Apple’s App Store.