Following the sell-off seen in the previous session, stocks went on a rollercoaster ride during the trading day on Tuesday. The major averages showed wild swings over the course of the session before closing in negative territory.
The major averages moved to the downside going into the close after a very volatile afternoon. The Dow fell 184.73 points or 0.6 percent to 32,632.64, the Nasdaq dipped 35.41 points or 0.3 percent to 12,795.55 and the S&P 500 slid 30.39 points or 0.7 percent to 4,170.70.
Adding to the steep losses posted on Monday, the major averages once again ended the session at new multi-month closing lows.
The volatility on Wall Street came as crude oil prices continued to skyrocket as President Joe Biden officially announced a U.S. ban on the import of Russian oil, liquefied natural gas, and coal in response to Russia’s unprovoked invasion of Ukraine.
Crude for April delivery gave back ground after reaching a high of $129.44 a barrel but still spiked $4.30 to $123.70 a barrel.
“We’re banning all imports of Russian oil and gas and energy,” Biden said. “That means Russian oil will no longer be acceptable at U.S. ports, and the American people will deal another powerful blow to Putin’s war machine.”
Biden acknowledged many European countries would not be able to join the U.S. in the ban but said his administration would work with their partners to reduce their dependence on Russian energy.
Earlier in the day, the European Union’s executive arm the European Commission had pledged to reduce Russian gas imports by two-thirds by the end of this year.
Gas stations are raising prices along with the spike in oil futures, as AAA said the average price for a gallon of gas has reached a record high of $4.173.
The national average gas price is up by nearly $0.11 a gallon from just yesterday and up more than $0.55 a gallon from a week ago.
The higher gas prices are likely to weigh on consumer spending in other areas, potentially leading to an economic slowdown even as the Federal Reserve prepares to begin raising interest rates.
Steel stocks showed a substantial move to the downside amid worries about global economic growth, with the NYSE Arca Steel Index plunging by 2.8 percent.
Significant weakness was also visible among healthcare stocks, as reflected by the 2 percent slump by the Dow Jones U.S. Health Care Index.
Utilities, tobacco and natural gas stocks also moved to the downside on the day. The Dow Jones Utility Average gave back ground after ending the previous session at a record closing high.
On the other hand, airline stocks moved sharply higher over the course of the session, with the NYSE Arca Airline Index soaring by 5.6 percent after ending the previous session at its lowest closing level in over a year.
Oil service stocks also saw continued strength, driving the Philadelphia Oil Service Index up by 3.3 percent to its best closing level in almost three years.
In overseas trading, stock markets across the Asia-Pacific region saw continued weakness during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 1.7 percent, while China’s Shanghai Composite Index plunged by 2.4 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index inched up by 0.1 percent, the German DAX Index closed just below the unchanged line and the French CAC 40 Index fell by 0.3 percent.
In the bond market, treasuries moved sharply lower amid concerns about higher inflation. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 12.1 basis points to 1.872 percent.
Amid a quiet day on the U.S. economic front on Wednesday, traders are likely to remain focused on developments overseas and in the energy markets.
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