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The ongoing crisis in Ukraine and uncertainties about commodity prices led to rollercoaster stock trading on Tuesday. The major averages eventually finished the day lower, adding to the previous day’s steep decline.
Investors continued to eye updates from Ukraine, as well as the action in commodities markets. At the same time, the Federal Reserve still loomed heavy on the horizon, with the central bank poised to begin raising interest rates next week.
While it showed gains in the middle of the session, the S&P 500 had trouble maintaining its bid. By the end of the day, the index finished -0.7%. The S&P 500 closed below 4,200 for the first time since last June.
Meanwhile, the Nasdaq (COMP.IND) finished -0.3%, down from an earlier 2.6% rise, as it failed to bounce back from the decline of 3.6% posted the previous day. The Dow (INDU) finished -0.6%.
In terms of closing numbers, the S&P 500 posted a decline of 30.39 points, finishing the day at 4,170.70. The Nasdaq dropped 35.41 points to end at 12,795.55. The Dow retreated 184.74 points to close at 32,632.64.
The 10-year Treasury yield climbed 10 basis points to 1.85%. The 2-year yield advanced almost 7 basis points to reach 1.61%.
Only three of the 11 S&P sectors concluded higher, with Energy posting the best performance, with a gain of 1.3%. Defensive sectors finished the weakest with Consumer Staples at the bottom, falling by more than 2.6%.
In retaliation for bans on energy imports, certain goods and materials will be restricted from leaving the Russian Federation, according to a report on a government website, Hammerstone Markets said.
After the headlines hit, oil moved up and stocks moved down. Meanwhile, the VIX, a measure of market volatility, ticked lower, but still finished above 34.
“[The] Fed has never started a rate tightening cycle with a VIX over 25 let alone two standard deviations above its long-run mean, as is the case now,” DataTrek wrote. “FOMC policymakers may still hike rates next week, but this data shows they will be in unprecedented territory relative to historical VIX levels and that makes for an additional risk factor for US equities.”