Russian President Vladimir Putin announced the recognition of the two republics established by Ukrainian separatists, triggering a heightened sense of risk aversion in the market. U.S. stock S&P 500 futures fell 2%, while New York crude oil rose 4%.
S&P 500 futures fell 2% intraday on Tuesday (22nd), Nasdaq 100 futures fell 2.8%, and Nikkei 225 fell 1.6%. West Texas Intermediate (WTI) surged 4% to 94.67 a barrel Dollar. The 10-year U.S. Treasury yield fell as much as 8 basis points to 1.84 percent, its lowest level since Feb. 4.
Putin signed a decree recognizing the two republics established by separatists in Udon and ordered the Ministry of Defense to send what he called “peacekeeping troops” to the separatist areas of Udon.
The United States and Europe condemned Russia’s latest move. The Biden administration has warned that Russia is building troops near Ukraine in a sign of a possible invasion of Ukraine, a claim the Kremlin has repeatedly denied.
International oil prices rose sharply as traders believed supplies of commodities such as energy could be disrupted if the situation in Ukraine escalated.
The deepening security crisis in Eastern Europe has left global investors with a high degree of uncertainty, and geopolitical risks have led investors to reduce bets on how much the US Federal Reserve may tighten monetary policy this year, which investors have ruled out. The possibility of the Fed raising interest rates by 2 yards next month.