On Wall Street, stocks are falling as the Oil price of oil in the United States temporarily reaches $130
NEW YORK (AP) — Stocks are sliding on Wall Street in early trade, as higher oil prices threaten to exacerbate the world’s already high inflation.
The S&P 500 was down 0.9 percent after a barrel of US oil surged above $130 overnight on speculation that the US would impose import restrictions on Russia. Stocks fell even more dramatically early in the day, but their losses were pared as oil prices fell back to $117 per barrel.
Some European markets even briefly reversed their steep losses. Stocks in Paris were nearly flat after falling as much as 5% earlier in the day.
As of 10:07 a.m. Eastern time, the Dow Jones Industrial Average was down 301 points, or 0.9 percent, at 33,313, while the Nasdaq composite was down 1%.
Gold and a gauge of Wall Street jitters were also up, but not as much as they had been when oil prices were at their highest. Gold momentarily surpassed $2,000 per ounce before settling at $1,975.80 per ounce, up 0.5 percent.
Oil prices, which have lately risen on fears that Russia’s invasion of Ukraine may disrupt already tight supply, had a major influence on the markets. Russia is one of the world’s top energy producers, and oil prices were already high prior to the assault, owing to the global economy’s increased need for gasoline following its coronavirus-related shutdown.
In a letter to her colleagues on Sunday, US House Speaker Nancy Pelosi stated that “the House is actively studying tough measures” to further isolate Russia as a result of its aggression on Ukraine. She said that this may include a restriction on Russian oil and energy imports.
Despite a long list of actions to penalise Russia, the US administration has failed to take this key step, citing the White House’s desire to keep oil market disruptions to a minimum. It seeks to keep price increases at the petrol pump to a minimum.
According to reports, US authorities are contemplating loosening sanctions against Venezuela. This might potentially free up more crude oil and alleviate fears about decreasing Russian supply.
After breaking the $4 threshold for the first time since 2008, a gallon of normal now costs an average of $4.065 across the board. According to AAA, a gallon of gas cost $3.441 a month ago.
After topping $130.50 earlier, a barrel of US crude oil was trading at $117.67 per barrel, up 1.7 percent. Brent crude, the worldwide benchmark, was trading at $120.47 a barrel, up 2%.
The crisis in Ukraine also poses a threat to food supplies in some places, such as Europe, Africa, and Asia, which rely on the Black Sea region’s vast, rich farmlands, dubbed the “breadbasket of the world.”
“The Ukraine-Russia crisis will continue to dominate market attitudes, and the lack of evidence of a settlement thus far may put a ceiling on risk sentiments entering the new week,” said Yeap Jun Rong, a market analyst at IG in Singapore.
“By now, it should be evident that economic sanctions will not prevent Russian aggression, but rather will function as a punitive measure at the price of global economic progress.” “Higher oil costs might put a strain on companies’ profitability and consumer spending plans,” Yeap added.
Bed Bath & Beyond’s stock skyrocketed after billionaire Ryan Cohen’s investment group bought a nearly 10% interest in the company and proposed major changes. Cohen is the co-founder of Chewy and has developed a cult following after taking a stake in GameStop, the faltering video game retailer where he was finally made board chairman.
Bed Bath & Beyond’s stock soared 58 percent to $25.57.
Treasury rates have risen, with the 10-year yield reaching 1.77 percent.