Stocks fell again on Monday, following four straight weeks of declines, as investors grew increasingly concerned higher energy prices stemming from the Russia-Ukraine conflict would slow the economy and raise inflation.
The Dow Jones Industrial Average lost 797.42 points to close at 32,817.38, dragged down by a nearly 8% loss in American Express. The S&P 500 declined close to 3% to 4,201.09, falling deeper into correction territory.
The 500-stock average sits more than 12% from its record close. The Nasdaq Composite lost 3.6% to 12,830.96, and now sits in the bear market territory, more than 20% from its all-time close.
As the Russia- Ukraine war continues, investors are monitoring the potential economic ramifications of disruptions in the global supply of energy.
“Consequently, ‘stagflation’ is rapidly becoming the central focus in portfolio strategies,” said Jim Paulsen, chief investment strategist for the Leuthold Group.
“Preparing for slower growth and more persistent inflation is driving investor fears and actions.”
Overnight on Sunday, U.S. oil prices hit their highest level since 2008 amid an ongoing war between Russia and Ukraine.
West Texas Intermediate crude futures, the U.S. oil benchmark hit $130 per barrel at one point before pulling back. WTI oil settled up 3.2% at $119.40.
The international benchmark, Brent crude, spiked to $139.13 per barrel — its highest since July 2008 — before pulling back to settle at $123.21.
Energy stocks rose alongside the price of oil. Baker Hughes added 4.7%. Chevron added 2.1%. Exxon Mobil rose 3.6%.
Meanwhile, bank stocks were among the biggest losers, on Monday with Citigroup down 1.8% and U.S. Bancorp down about 3.9% as investors grew concerned about slowing economic growth.
McDonald’s, Starbucks, and Nike fell on Monday on concern about $4 gas prices hitting consumers’ wallets. On Sunday, gas prices surged to their highest level since 2008.
With the national average hitting $4.06 a gallon, according to AAA. Airlines, cruise lines, and travel stocks declined for the same reason.
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Secretary of State Antony Blinken said Sunday that the U.S. and its allies are considering banning Russian oil and natural gas imports in response to the country’s attack on Ukraine.
House Speaker Nancy Pelosi also said in a letter to Democratic colleagues that the chamber is “exploring strong legislation” to ban the import of Russian oil — a move which would “further isolate Russia from the global economy.” CNBC!