Stocks finished lower on Tuesday amid ongoing conflict between Russia and Ukraine, although a brief rally in the afternoon allowed the major averages to cut their losses.
At the end of a choppy trading day, the Nasdaq (COMP.IND) ended -1.2%, S&P (SP500) -1% and Dow (DJI) -1.4%. Still, the selloff was enough to push the S&P 500 into correction territory for the first time since Mar. 2020’s COVID-related selloff. The key index has lost 10.6% since peaking at 4,818 on Jan 4.
President Joe Biden addressed the Russia Ukraine situation and said the U.S. has sanctioned Russia’s financial institutions and sovereign debt. The U.S. has declared the Russian troop movement an invasion of Ukraine, according to the AP.
All 11 S&P sectors concluded lower. The Consumer Discretionary segment declined the most, with Tesla a notable decliner among the high-profile players, ending the day -4.1%. Utilities fared the best among the sectors.
The Treasury yield curve flattened. The 10-year yield dropped 1 basis point to 1.92% and the 2-year went up 6 basis points to 1.53%.
From “a fundamental perspective we are in the same position since the hawkish pivot by Fed Chair Powell in mid-December,” Cannacord’s Tony Dwyer wrote.
“The Fed remains in a box and is set to raise rates in March,” he said. “There is no data between now and the March meeting that would postpone the end of asset purchases and initial rate hike. Current inflation is too high, and Unemployment is too low.”
“There has been a flight to safety into U.S. Treasuries given the Russia-Ukraine tensions, which has further muddied the water by significantly flattening the 2/10 year U.S. Treasury Yield Curve.”
Among active stocks, Home Depot is the biggest decliner in the S&P 500 after reporting results with margins a concern.