Markets Drop as Russia Invades Ukraine and Sanctions Follow
WASHINGTON — Russia’s attack on Ukraine sent most global stock markets downward Thursday as threats of economic sanctions continued among world leaders.
“We’re going to impair their ability to compete in the 21st century high-tech economy,” President Joe Biden said at a White House press conference.
He also said he would shut off all Russian bank access to U.S. markets.
The United States is being joined in the sanctions by 27 European countries, Australia, Canada, Japan and other countries.
The Dow Jones Industrial Average declined sharply early Thursday before recovering after Biden’s speech to close up about 0.3% compared with Wednesday. The New York Stock Exchange composite index trended downward by about 0.4%.
The stock market had been slipping for several weeks as the risk of war became more obvious.
European markets fell by an average near 4% for the day. Most Asian markets were down more than 1.5%.
Oil prices jumped to more than $100 a barrel for the first time since 2014, prompting economists to renew warnings about inflation.
Russia is one of the world’s biggest producers of oil and natural gas. Sanctions threatened by western European nations include shutting off oil and natural gas imports from Russia.
Biden said he would try to protect U.S. consumers from the economic impact of war but added that he could make no guarantees.
“I know this is hard and Americans are already hurting,” Biden said.
He added, “Putin is the aggressor. Putin chose this war and now he and his country will bear the consequences.”
He predicted an impact on nearly all sectors of the Russian economy that he said would “degrade its industrial capacity for years to come.”
He anticipated a spike in U.S. oil prices when he said, “We’re taking active steps to bring down the costs.” He did not elaborate.
The value of cryptocurrencies dropped by steep margins early in the day but recovered to close up. Bitcoin rose in value by about 3%. Ethereum ethers were up by about 2%.
Exchange market media company CoinMarketCap reported that more than $160 billion of value was eliminated from cryptocurrency markets within 24 hours of the Russian invasion before climbing Thursday.
A big unknown for international and consumer markets is the long-term damage from a protracted trade war.
A Citi Global Wealth Investments advisory said, “There is severe uncertainty regarding the extent of the conflict itself, potential knock-on impacts on other regional disputes, unknown consequences as sanctions affect financial markets, a likely rise in cybersecurity intrusions, extension of supply chain disruptions and other inflationary impacts.”
Russian President Vladimir Putin has responded with unspecified threats of reprisal.
A Russian Foreign Ministry statement said, “There should be no doubt that sanctions will receive a strong response, not necessarily symmetrical, but finely tuned and painful to the American side.”
Biden appeared to anticipate that the “finely tuned” response might include cyberattacks when he said, “If Russia pursues cyberattacks against our companies, our critical infrastructure, we’re prepared to respond.”
Tom can be reached at [email protected]