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- The S&P 500, the Dow Jones, and the Nasdaq Composite fell between 1.43% and 3.07%.
- Ukraine/Russia conflict escalation points towards a Russia’n invasion as reported by US press, confirmed by the US Security Advisor.
- Market sentiment was dismal, as safe-haven flows like gold, the USD, and the yen dominated the end of the week.
- Western Texas Intermediate finished the week above $93.10 per barrel as geopolitical tensions arose.
On Friday, US equities dropped sharply as recent geopolitical chatter linked to the Ukraine – Russia conflict. US news sources said that a Russian invasion of Ukraine was imminent, spurred a flight to safe-haven assets.
As the New York session ends, the S&P 500 drops 2.05%, at 4,410.85. The Dow Jones Industrial falls some 1.45%, at 34,729.63, and the tech-heavy Nasdaq Composite slides 3.17%, sits at 14.230.95.
Sector-wise, energy (boosted by rising oil prices) and utilities advance 2.79% and 0.01% each, while the biggest losers are technology, consumer discretionary, and communications, sliding 3.01%, 2.82%, and 2.54%, respectively.
US press wires report that Russia decided to invade Ukraine
Around 18:30 GMT, according to a PBS NewsHour reporter, “the US believes that Russian President Vladimir Putin has decided to invade Ukraine and already communicated those plans to the Russian military. Two Biden administration officials said they expect the invasion to begin as soon as next week.”
The reporter continued “that US defense officials anticipate a “horrific, bloody campaign” that begins with two days of bombardment and electronic warfare, followed by an invasion, with the possible goal of regime change. Reportedly, the North Atlantic Council was briefed on the new intel today.”
The US National Security Advisor confirms the rumors
Later in the day, rumors were confirmed by National Security Advisor Jake Sullivan. He said, “we are in the window where a Russian invasion of Ukraine could begin at any time and could happen during the Beijing winter Olympics.” Furthermore, he added that “the US continues to see signs of escalation at the border, and would respond decisively should Russia invade.”
Jake Sullivan urged all Americans in Ukraine to leave “as soon as feasible.” Moreover, Sullivan said, “we are not saying Putin has made a final decision, but Russia now has all forces it needs to conduct a major military action, but he did clarify a false flag operation is also possible by Russia.”
As Wall Street closed, it crossed the wires the news that the US President Joe Biden and Russia’s Vladimir Putin would talk over the phone on Saturday, per Via citing the Kremlin.
Putting the geopolitical jitters aside, the greenback got bid, with the US Dollar Index, advancing close to 0.50%, reclaiming 96.05, linked to safe-haven flows. US Treasury yields fell in the bond market, led by the 10-year yield down eleven basis points, below 2% at 1.916%, a tailwind for precious metals.
At the same time, gold rises 2% exchanges hands at $1864.44 a troy ounce, while US crude oil benchmark, WTI, hit $93.10 per barrel amid revived Ukraine invasion concerns going into the weekend.
In the FX Market, the EUR/USD got hammered by the crisis, trading at 1.1345, while the GBP/USD barely unchanged at 1.3550 got a boost from higher UK’s GDP numbers. Concerning safe-haven pairs, the USD/JPY failed to cling to the 116.00 figure influenced by safe-haven flows, trades at 115.31, while the USD/CHF finished at 0.9243.