Stocks on Wall Street lost early gains and finished broadly down on Monday as the United States proceeded to shut its embassy in Ukraine amid rising concerns over thousands of Russian troops gathering on the border.
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The S&P 500 plummeted 0.4% after falling as much as 1.2% immediately after the United States announced the closure of its embassy in Ukraine and the relocation of all remaining staffers to a city near the Polish border. The decision comes as diplomatic attempts to avert what U.S. officials have said maybe an impending Russian strike on Ukraine resumed on Monday.
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The Dow Jones Industrial Average dipped 0.5%, while the Nasdaq Composite finished basically unchanged after rising 1% in the first half. The three main market indices had all suffered a weekly loss.
The S&P 500 dropped 16.97 points to 4,401.67. Almost 80% of the equities on the benchmark index declined. Financial, health-care, and energy companies were among the market’s heavyweights. Citigroup sank 1%, Moderna plummeted 11.7%, and Exxon Mobil fell 1.5%.
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The Dow Jones Industrial Average slid 171.89 points to 34,566.17. By midafternoon, the blue-chip index had fallen 433 points. The Nasdaq fell 0.24% to 13,790.92. Smaller company equities, which had been rising, also dipped. The Russell 2000 index fell 9.36 points, or 0.5%, to 2,020.79.
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The possibility of an escalation in the crisis between Russia and Ukraine also weighed hard on European markets, which sank dramatically. The price of crude oil in the United States increased by 2.5%, while natural gas prices increased by 6.4%. Russia is a big producer of energy. Any military action that affects supply has the potential to reverberate across the energy markets and global economy.
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The price of gold, which has traditionally served as a safe haven during times of global concern, increased by 1.5%. Bond yields have also risen. The 10-year Treasury yield increased to 1.99% from 1.94% late Friday.
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Inflation has reached a four-decade high, and the Federal Reserve intends to hike interest rates to help reduce it. The central bank is set to begin raising its benchmark interest rate in March, with Wall Street anticipating up to seven rate hikes this year.