The stock market tumbled on Wednesday as oil prices spiked yet again due to supply disruptions from Russia’s invasion of Ukraine, and investors face renewed inflation fears even after the Federal Reserve pledged to more aggressively raise interest rates in a bid to fight surging prices.
Stocks fell as oil prices surged: The Dow Jones Industrial Average fell 1.3%, around 450 points, while the S&P 500 lost 1.2% and the tech-heavy Nasdaq Composite 1.3%.
Investors continue to assess the ongoing war between major oil exporters Russia and Ukraine, as the Biden administration prepares a new round of sanctions and NATO sends more troops to its eastern flank.
Markets have taken a hit from the surging commodity prices that have resulted from the conflict, with experts warning that higher prices will hit consumers and exacerbate inflation—especially if the European Union decides to follow the United States in banning Russian oil imports.
Oil prices jumped in volatile trading again on Wednesday amid growing concerns over supply disruptions from Russia’s invasion of Ukraine, as “the drop in Russian crude exports finally appears underway,” according to Matt Smith, lead oil analyst for the Americas at Kpler.
The price of US benchmark West Texas Intermediate jumped 5% and now stands at $115 per barrel, while international benchmark Brent crude trades at around $121 per barrel.
Government bond yields, meanwhile, have continued to surge higher this week after the Federal Reserve vowed to be more aggressive in its fight against inflation: The 10-year US Treasury note surpassed 2.41%—its highest level since May 2019—on Wednesday.