Stocks fell on Tuesday—adding to losses this week after the S&P 500’s worst day since 2020—following President Joe Biden’s announcement that the United States will ban Russian energy imports, a move which sent oil prices soaring higher to nearly $130 per barrel.
The Dow Jones Industrial Average fell 0.6%, nearly 200 points, while the S&P 500 rose 0.7% and the tech-heavy Nasdaq Composite 0.3%.
Tuesday’s gains follow a steep sell-off on Wall Street a day earlier, in which the S&P 500 plunged nearly 3%—its biggest drop since 2020—the Dow tumbled 800 points and the Nasdaq lost 3.6%, putting the index into bear market territory .
Surging commodity prices—including everything from oil, natural gas and precious metals—have surged in recent weeks due to the ongoing conflict between Russia-Ukraine, with experts now worrying that could lead to a slowdown in global economic growth.
In the US markets especially, investors have become increasingly risk-averse, turning to safe haven assets like Gold amid fears that soaring energy prices will exacerbate already high levels of inflation, which remains at 40-year highs.
Oil prices continued to jump on Tuesday as Biden announced a ban on Russian oil imports in response to the country’s actions in Ukraine: US benchmark West Texas Intermediate now sits at $125 per barrel, while global benchmark Brent crude is trading at around $129 per barrel.
Russia, for its part, has warned that oil prices could surge to around $300 per barrel if the West proceeds with a ban on its energy exports: “A rejection of Russian oil would lead to catastrophic consequences for the global market,” Deputy Prime Minister Alexander Novak said Monday.