Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
General underperformance plagued stock futures and indexes across three continents following heightened tensions between Russia and Ukraine.
Following the recent Russia incursion into Ukraine, US stock futures fell steeply during the pre-market trading session on Thursday, February 24th.
For instance, futures tied to the Dow Jones Industrial Average declined 655 points, or 1.98%. Furthermore, the S&P 500 futures also fell by 1.99%, while the NASDAQ 100 futures dropped by 2.65%. Meanwhile, in the regular trading session, the DJIA fell by approximately 464 points, or 1.3%, while the tech-heavy NASDAQ Composite gave up about 2.6%. Furthermore, the S&P 500 receded by 1.8% and inched further into correction territory. It ended the day approximately 12% shy of its all-time high close recorded on January 3rd.
US stocks have recently been taking a beating as the tighter Federal Reserve monetary policy looms. The American central banking system’s anticipated hike in interest rates has done little to boost investor sentiment. Brad McMillan, chief investment officer for Commonwealth Financial Network, touched on the ongoing trend, saying:
“Market volatility is normal, but the truth is that the decline we have seen so far is much less than might have been expected. That is due to the strength of the fundamentals, which should continue.”
Europe & Asian Stocks
Meanwhile, across the Atlantic in Europe, stocks also declined in early trading on Thursday. For instance, the FTSE 100 fell 2.5% in London, while Germany’s DAX 30 receded by 4%. In addition, France’s CAC 40 also gave up 4%, while Russian stocks plummeted – with the Eastern European nation’s main index crashing by 45%. On the foreign exchange front, the Russian ruble briefly crashed 10% to a record low of 90 against the US dollar.
In East Asia, there was also a general underperformance in stocks. China’s Shanghai Composite receded 1.7%, while Hong Kong’s Hang Seng Index (HSI) moved 3.2% lower – representing its biggest daily loss in five months. Additionally, Korea’s Kospi declined by 2.6%, and Japan’s Nikkei 225 (N225) dipped by 1.8%.
Oil Prices Boom
Conversely, oil prices rose, with West Texas Intermediate futures trading 5.61% higher at $97.27 per barrel. In addition, the global benchmark Brent Crude surged 5.95% to $102.60 per barrel. This marks the first time since 2014 that it will be clearing the $100 price level.
Stock Futures Aside, Russia to Face Sanctions from the West Following Its Decision to Invade Ukraine
In the aftermath of Russia’s attack on Ukraine, US President Joe Biden has decried the actions of the Eastern European powerhouse. Biden says “the world holds Russia accountable,” and promised that heavy sanctions would follow. In addition, the US President also said:
“Russia alone is responsible for the death and destruction this attack will bring, and the United States and its Allies and partners will respond in a united and decisive way.”
On the day that Russian forces invaded Ukraine, there were reports of explosions in multiple cities in Ukraine, including its capital Kyiv. However, Ukrainian president Volodymyr Zelensky has promised that the country would defend itself.