Shares on Wall Street finished mostly lower on Mon in another volatile trading session. The US is closing its embassy in Kyiv, Ukraine, shifting it to Lviv, in western Ukraine. Secretary of State Antony Blinken cited the “dramatic acceleration in the build-up of Russian forces” near Ukraine’s borders.
The Dow Jones Industrial Average lost 171.89 pts, or 0.49%, to close at 34,566.17. The broader S&P 500 index notched its third straight drop to fall 0.38%. The tech-heavy Nasdaq Composite closed nearly flat. The small cap Russell 2000 dropped 0.46%.
Ukrainian President Volodymyr Zelenskiy, who thinks that US warnings of an imminent Russian invasion might be making an already volatile situation worse, himself made things worse with a sarcastic post on Facebook that was misinterpreted. Zelenskiy posted, “We are told that Feb 16 will be the day of the attack,” and that everyone is going to wear “blue and yellow ribbons.” Markets tumbled until Zelenskiy, a former professional comedian, clarified he was kidding.
The Cboe Volatility Index (VIX), which is also known as the “fear index” gained 3.55 percentage points to close at 28.33 on Mon.
Tower Semiconductor (TSEM US, -1.98%) jumped 48.35% in after-hours trade on Mon after a WSJ report said that Intel (INTC US, -0.1%) is near a deal to buy the Israeli company for almost US$6b.
Splunk (SPLK US, 9.13%) shares rose following reports that Cisco Systems (CSCO US, -1.34%) held discussions about acquiring the software company. Bloomberg subsequently reported that talks between the companies had ended.
There were some expectations that St. Louis Fed President James Bullard would walk back the very hawkish comments he made last week when he did an interview with CNBC Mon. He didn’t. Bullard reiterated that the Fed needed to “front-load more of our planned removal of accommodation” in order to fight inflation more aggressively. US Treasury yields rose in response.
The yield on the 10-year Treasury note notched up 5.03 basis points (bps) to 1.9875% while the yield on the 2-year climbed 7.46 bps to 1.5744%.
Gold advanced to the highest price since mid-Nov. The most actively traded US gold futures (Apr) contracts settled up $27.20, or 1.5%, at US$1,869.40/oz. March silver rose 47.9 cents, or 2.0%, to end at US$23.848/oz.
The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, rose 0.30% to 96.374.
The front-month Brent and WTI futures closed up $2.04 at US$96.48/bbl and $2.36 at US$95.46/bbl respectively
European equity markets finished lower on Mon. The UK FTSE lost 1.69%, France's CAC 40 fell 2.27%, while the German DAX retreated 2.02%.