Markets shuddered Thursday and then swung wildly after Russia’s invasion of Ukraine threatened to push the high inflation squeezing the global economy even higher.
Initially, stocks tumbled as prices surged for oil, wheat and other commodities on worries the conflict would disrupt global supplies. But the moves moderated as the day progressed, particularly after President Joe Biden said he wanted to limit the economic pain for Americans and announced new sanctions that fell short of what some had suggested.
On Wall Street, the S&P 500 tumbled 2.6% at the start of trading before erasing the drop and flipping to a gain of 1.5%. The heaviest losses hit stocks in Europe, after officials called Russia’s nearby moves a “brutal act of war,” with the German DAX down 4%.
Beyond its tragic human toll, the conflict looked set to send prices even higher at gasoline pumps and grocery stores around the world. Russia and Ukraine are major producers not only of energy but also grains and various other commodities.
Oil prices on both sides of the Atlantic briefly jumped above $100 per barrel to their highest levels since 2014. But they gave back much of their gains after Biden said the sanctions package is “specifically designed to allow energy payments to continue.” While he described the sanctions as severe, Ukrainian officials urged the U.S. and West to go further and cut Russia from a crucial financial payments system called SWIFT.