Russia stock market index fell nearly 8% as Ukraine conflict fears shaked markets.
The U.S. State Department said on Sunday it was ordering diplomats' family members to leave Ukraine in one of the clearest signs yet that American officials are bracing for an aggressive Russian move in the region.
Fears of conflict pummelled shares across the world while bolstering the dollar and oil.
Equities in Europe declined on Monday and U.S. futures reversed gains as the rout in technology stocks deepened amid concerns over the Federal Reserve’s imminent rate liftoff. Bonds gained.
Tech stocks were among the largest decliners as the Stoxx Europe 600 index dropped almost 2%, on track for the biggest two-day slump since October. Tensions between Russia and Ukraine exacerbated the risk-off mood and European shares with exposure to the region also under pressure.
U.S. equity futures edged lower, dimming hopes of some respite after one of the worst stretches for global shares last week since the pandemic began. Contracts on the tech-heavy Nasdaq 100 turned lower after climbing as much as 1% earlier. The Treasury 10-year yield dipped along with rates on most European bonds. A dollar gauge ticked higher.
The Fed on Wednesday is expected to signal a March hike in interest rates and balance-sheet reduction later this year to help fight inflation. Ebbing stimulus is forcing a rethink about the economic and market outlook.
Aside from the Fed and Ukraine, earnings updates from titans such as Apple Inc. will shape sentiment too in the days to come following an uneven start to the reporting season. Tech stocks have borne the brunt of an equity selloff this year, while some less richly valued parts of the market have held up better.
There is “likely a longer term rotation toward value stocks measured in quarters, not weeks” unfolding, Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, wrote in a note. “Investors should retain a balanced view, staying patient in committing new capital to equities.”
Goldman Sachs Group Inc. economists said they see a risk the Fed will tighten monetary policy more aggressively this year than the Wall Street bank now anticipates.
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