Ukraine crisis hits US stock market: Fear of Putin's invasion causes tremors on Wall Street

Created: 02/12/2022, 11:09 am

By: Bedrettin Bölükbasi

Fear of war in Ukraine hit American stock markets hard.

©John Angelillo/IMAGO

The escalating conflict in Ukraine and the threat of war are already having an impact on US stock markets.

In addition, oil prices skyrocketed.

Munich – There is currently a risk of war in Ukraine.

Although the West is trying to prevent this, as Chancellor Olaf Scholz* (SPD) has already emphasized, US officials have been assuming since yesterday

that the Russian ruler Vladimir Putin* gave the order to invade Ukraine* granted and the attack could begin as early as next week.

US President Joe Biden* spoke of a "world war" if American and Russian soldiers were to shoot at each other.

Now suddenly there is a danger of a large-scale war in Europe.

As expected, this new level of escalation did not go down well with American stock markets.

It was already clear beforehand that the stock exchanges would suffer damage in the event of an increasing escalation.

In addition to the tremors in the stock markets, the price of oil rose - and could shoot even higher.

Ukraine crisis: Dow Jones, Nasdaq and S&P record heavy losses - no calming down expected

The new tense state of affairs in the Ukraine conflict* and statements by US officials such as National Security Advisor Jake Sullivan that an attack could begin in a few days shocked US stock markets.

Only a short time after the statements, the Dow Jones index lost a good 400 points on Friday evening

, which corresponds to around one percent.

The index closed the day down 1.43 percent at 34.745 points.

The Nasdaq technology index was hit even harder: it lost 3.17 percent and thus dropped to 14.248 points.

The S&P 500 stock index, which includes the shares of 500 of the largest publicly traded US companies, ended the day down 1.9 percent to end the day at 4418.64 points.

According to market analyst Edward Moya of broker Oanda, stock traders were quick to sell after it was revealed that the US* was expecting a continued invasion of Ukraine.

According to Moya, contrary to expectations, the Ukraine crisis is no longer calming down.

The quake in the US stock exchanges is likely to continue.

Ukraine crisis: Russian invasion would also affect the European market - "losses of up to ten percent"

However, not only American stock exchanges are affected.

If an invasion by Russia would actually occur, European stocks would fall by up to ten percent in the short term, as the

reported, citing experts.

The North American analysis company BCA Research increased the probability of this scenario from 50 to 75 percent.

German analysts, on the other hand, are less pessimistic.

The money manager Starcapital, for example, assumes a 20 percent probability of a Russian attack.

Werner Rapp, the CEO and head of investment at the Feri Group, responsible for 53 billion euros in investment funds, pointed to the "surprise" of a possible invasion by Moscow.

This would hit European stocks the hardest, Rapp said.

“As a direct reaction to an invasion, I would expect further index drops of five to ten percent.

Markets closer to Ukraine such as Austria and Poland* could also lose more than ten percent,” explained the investment manager, explaining possible effects on European stocks.

Ukraine Crisis: Oil Prices Soar Over Invasion Fears - Record Could Be Beaten

The escalation in the Ukraine conflict also affected the oil price.

The sudden rise in prices is likely to be a greater burden for both investors and ordinary citizens.

The price of a barrel (approx. 159 liters) of the WTI (West Texas Intermediate) variety increased by around 4.27 percent and rose to $94 - a new record for the last seven years.

Since the beginning of December 2021, a price increase of a good 44 percent has been registered.

The US bank JPMorgan warned of much higher oil prices in the event of an actual invasion.

According to a recent JPMorgan report, this would trigger another spike in oil prices.

"Any disruption to oil flow from Russia could easily push oil prices to $120," underlined JPMorgan expert Natasha Kenava.

However, this value could not be the peak for a long time.

If the flow of oil from Russia* were cut in half, the price of a barrel of oil would rise to around $150, according to JPMorgan, surpassing the previous high of $174.5 per barrel in July 2008.