By Yasin Ebrahim

Investing.com – The S&P 500 closed lower Monday, as investors weighed up the impact of hard-hard-hitting sanctions on Russia over its ongoing invasion of Ukraine.

This fell 0.30%.

The sanctions included booting certain Russia banks from the global payment SWIFT, and freezing Russia central bank’s ability to tap its $640 billion of reserves abroad, which serves as a rainy day fund to protect its economy.

Talks between Russia and Ukraine to find a resolution to the conflict are expected to resume in the coming days as both sides pledged  “to keep the negotiations going,” following the first round of talks. 

Reports that Russia increased its aggression against Kharkiv and is moving closer to Kyiv, have thwarted hopes for a peaceful resolution to these issues.

Financials, mostly banks, led the market lower as investors weighed up the exposure of U.S. banks to Russia in the wake of tougher sanctions aimed at crippling Russia’s economy to deter Moscow to end its invasion of Ukraine.

The biggest droppers are: Citigroup After being warned of the potential $5.4 billion loss from Russian assets exposure, (NYSE 🙂 plunged more than 4% JPMorgan Chase(NYSE 🙂 suspended its Russia fund and emerging Europe fund, sending JPMorgan Chase shares lower by more than 4%.

In addition to the negative impact of Russian sanctions, investors’ sentiment in banks was affected by lower U.S. Treasury yields. These trade in an opposite direction to prices and as such, investors fled for safety.

The net interest margin is the difference in interest income earned by banks and interest received from depositors. It falls as a result of falling Treasury yields.

As a result, energy was the only sector to be green. Oil prices rose 4% amid continuing geopolitical tensions.  

BP (NYSE:) dropped 5% when it announced that its Russian-oil company Rosneft 19.75% stake would be sold at a loss as high as $25 billion. Rival Shell, LON:), also announced it would close all Russia operations which could cause impairments up to $3B.

With the increase in defense stocks (which are useful during wartime), Northrop Grumman (NYSE: Lockheed Martin (NYSE: ) Rising More Than 5%

Another story: Stocks of electric vehicles were rising on hopes that soaring fuel prices will encourage EV adoption.  

Tesla (NASDAQ) rose 7% following Bernstein’s increase in the price target for the company from $300 to $450.