Oil prices surged past $116 a barrel on Monday and U.S. stocks turned negative — with the Dow sliding 200 points — as the war in Ukraine and inflation dominated investors’ attention.
The major U.S. indexes erased mild advances, then remained in the red after Federal Reserve Chair Jerome H. Powell raised the specter of bigger interest rate hikes to beat back decades-high inflation. The Dow Jones industrial average shed 201.94 points, or 0.6 percent, to close at 34,552.99. The tech-heavy Nasdaq fell 55.83 points, or 0.4 percent, to settle at 13,838.46, while the broader S&P 500 index edged down 1.94 points, or 0.04 percent, to end at 4,461.18.
Last week, all three indexes notched their best weekly performance since November 2020, boosted by a cool-down in oil prices that had spiked past $130 a barrel in early March. But prices have swelled as bombardments intensify and resolution seems to remain out of reach. An attack on Saudi oil facilities over the weekend injected further uncertainty into energy markets.
Additional pressure came as the European Union weighed whether to ban Russian oil, a move that would strike a direct blow to Russia’s main financial artery — oil sales account for 40 percent of the Russian government’s budget, according to Russia’s Finance Ministry — while also cutting the bloc off from its biggest energy supplier.
The Bank of Russia said Monday that federal loan bonds would resume trading, days after the government made a $117 million interest payment to foreign bondholders, averting what would have been its first foreign debt default since 1918. Other trading remains suspended, as the government seeks to shield stocks from the pain that Russian-listed firms outside the country have felt in recent weeks amid the cavalcade of sanctions.