Jakarta, CNBC Indonesia – Stock markets in the United States (US) weakened at the open trading Tuesday (1/3/2022), amid the approaching Russian military convoy approaching the Ukrainian capital of Kiev.
The Dow Jones Industrial Average fell 100 points (-0.3%) at 08:30 local time (21:30 WIB) and within 30 minutes to 228.49 points (-0.67%) to 33,664.11. The S&P 500 fell 15.66 points (-0.36%) to 4,358.28 and the Nasdaq was down 20.89 points (-0.15%) at 13,730.51.
World oil prices soared, where the benchmark contract price in West Texas Intermediate (WTI) rose 5% and exceeded the US$ 100/barrel mark. This triggers concerns that inflation in developed countries will rise.
Yield (yield) 10-year US Treasury bonds fell to 1.76%, with investors turning to assets safe haven. Decrease yield indicates the price shot up due to the rush of investors.
The move was sparked by the Russian-Ukrainian conflict, in which Russian troops have closed in on Kiev, while Ukrainian and Russian officials ended a crucial round of talks yesterday.
The Western Bloc also imposed severe sanctions, including their corporations. Visa and Mastercard block financial services in Russia. Financial stocks were the main ballast on Wall Street. Bank of America shares fell 1.9%, Citigroup fell 1.8% and Charles Schwab dropped 3%.
“Volatility increases after the wall of worries continued to rise. “Geopolitical uncertainty, soaring inflation, rising benchmark interest rates and the breakdown of technical price trends have weighed on sentiment and stock prices,” said Terry Sandven, chief stock planner at Bank Wealth Management, as quoted in the statement. CNBC International.
Russia’s central bank more than doubled its benchmark interest rate yesterday as the ruble plummeted after heavy sanctions were imposed on Moscow by Western powers. Now investors are ready to hear statements from the boss of the US central bank (Federal Reserve / The Fed) Jerome Powell in the mid-year session before the US House of Representatives on Wednesday (2/3).
Investors will also be watching February’s Purchasing Managers’ Index (PMI) data due at 09:45 am local time and the US Manufacturing Institute of Supply Management (ISM) data for February at 10:00 am local time.
Yesterday was the last trading day in February, where the Dow Jones index fell 3.5% during the month of February. The S&P 500 and Nasdaq indexes shed 3.1% and 3.4% on a monthly basis, respectively.
CNBC INDONESIA RESEARCH TEAM
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