An ugly stretch for U.S. equities intensified to start the week as the crisis in Ukraine worsened and investors weighed the prospect of further sanctions to cripple the Russian economy as the Kremlin wages war in Eastern Europe.
Against that backdrop, the Dow Jones Industrial Average
DJIA,
-2.37%
closed sharply lower Monday, marking its lowest close of 2022 and finishing in correction territory for the first time in over two years.
A close below 33,119.685 was the level needed to mark a 10% decline from its Jan. 4 record high, meeting the commonly used definition of a correction. The Dow finished Monday trade at 32,817.38.
The Dow last finished in correction on Feb. 27, 2020, and extended the decline into a bear market, defined as a drop of at least 20% from a recent peak, during the height of the pandemic-fueled selloff two years ago.
The Dow would join the S&P 500
SPX,
-2.95%
in correction territory, which the broad-based index entered on Feb. 22 for the first time in two years.
A surge in crude oil
CL.1,
-0.87%,
as investors contemplated the next steps that the White House might take to punish Moscow, was sparking concerns about a potential global economic recession.
Read: What soaring crude prices mean for the U.S. stock market, amid talk of Russian oil sanctions
Russia’s unprovoked invasion of Ukraine, now in its 12th day, has roiled commodity markets, and soured relations between the Kremlin and the West, with selected Russian banks removed from the SWIFT payment network, a key mechanism for communicating global payments. Much of Russia’s stock market remains closed as the ruble
USDRUB,
-8.08%
collapses.
The decline in U.S. markets also pushed the Nasdaq Composite
COMP,
-3.62%
into a bear market, defined as a 20% pullback. Monday’s close left the tech-heavy index down 21% from its Nov. 19 closing record.