As the trading week opened on March 7th, the value of key stocks dropped once again after declining steadily over the past four weeks. This was chalked up to investors’ mounting concerns regarding the escalating cost of crude oil and processed fuels in the global market due to Russia’s ongoing invasion of Ukraine. Experts opine that the conflict also throws a wrench into economic growth and heightened inflation throughout the world.
In the United States, the Dow Jones Industrial Average was down by 797.42 points, closing at 32,817.38. American Express stocks were the hardest hit, pegging a loss of around 8%.
Other indexes also felt the impact of the invasion. The Standard and Poor (S&P) 500 registered a drop of 3%, edging dangerously close to correction at 4,201.09. In the tech scene, the Nasdaq Composite also fell by 3.6% to 12,830.96, falling into a bear run.
Time to Watch Energy Stocks
One key issue that complicates the already adverse impact of the Balkan crisis on global stocks is how the conflict will affect the world’s energy sources supply.
As of the evening of Sunday, March 6th, crude oil prices in the US hit their highest since 2008. The country’s benchmark for oil prices, West Texas Intermediate (WTI)’s crude futures, hit an astronomic $130 a barrel before pulling back. However, WTI eventually calmed down, dropping just 3.2% to settle at $119.40.
On the other hand, global benchmark Brent Crude also hit its highest rate since July 2008: approximately 139.13 a barrel before settling down to $123.21.
As the price of oil teetered in the balance, the value of energy stocks also rallied. Baker Hughes’ stock was up by 4.7% per unit; Chevron up by 2.1%, and Exxon Mobil posted a 3.6% increase.
On the other hand, bank stocks and the stocks of several major consumer brands took a serious hit. Citigroup’s dropped by 1.8%, while US Bancorp posted a drop of 3.9% as investors and financial analysts noted a potential slowdown in terms of economic growth. McDonald’s, Nike, and Starbucks also posted significant losses over the weekend.
Likewise, stocks for airlines, cruise companies, and travel companies also declined due to growing concerns regarding the seemingly unstoppable increase in gas prices.