Wall Street is gauging the further effect of the conflict between Russia and Ukraine on asset prices

As the S&P 500 hovers near correction territory, Wall Street is gauging the further effect of the conflict between Russia and Ukraine on asset prices, with some strategists warning investors to keep their cool and focus on longer-term market trends. 

Worries over geopolitical strife and a more hawkish Fed have combined to take the S&P 500 down nearly 10% from an all-time high hit in early January. The benchmark index was recently off around 0.7% on Tuesday after President Joe Biden announced new sanctions against Russia for what he called the beginning of an invasion of Ukraine. 

Still, some analysts maintained the longer-term impact of the geopolitical strife could be fleeting and urged investors not to overreact to recent market moves. How the worsening confrontation in Eastern Europe could affect the Fed’s actions has been a topic of debate. 

Economic Calendar

While some have worried that rising oil prices, which stand around their highest level since 2014, could push up inflation and force the central bank to become even more aggressive.

Dow Jones Industrial Average

The Dow Jones Industrial Average lost 1.42% to hit a new 6-months low. The best performers of the session on the Dow Jones Industrial Average were McDonald’s Corporation, which unchanged 0% or 0 points to trade at 250.60 at the close. Meanwhile, Amgen Inc. unchanged 0% or 0 points to end at 220.77 and The Travelers Companies Inc. was unchanged 0% or 0 points to 170.63 in late trade. The worst performers of the session were Home Depot Inc., which unchanged 0% or 0 points to trade at 346.87 at the close. Boeing Co unchanged 0% or 0 points to end at 209.03 and Nike Inc. was 0% or 0 points to 142.95.

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NASDAQ 100

The NASDAQ index lost 1.23%. The top performers on the NASDAQ Composite were Imperial Petroleum Inc. which was unchanged 0% to 0.49, China Natural Resources Inc. which was unchanged 0% to settle at 0.6103 and Paltalk Inc. which was unchanged 0% to close at 3.1400. The worst performers were Color Star Technology Co Ltd which was unchanged 0% to 0.5158 in late trade, Dogness International Corp Class A which was unchanged 0% to settle at 4.2700, and Zosano Pharma Corp which was unchanged 0% to 0.2159 at the close.

Oil

Oil prices stabilized today after hitting seven-year highs in the last session as it became clear the first wave of the U.S and European sanctions on Russia for sending troops into eastern Ukraine would not disrupt oil supplies. At the same time, the potential return of more Iranian crude to the market, with Tehran and world powers close to reviving a nuclear agreement, also kept a lid on prices. U.S crude futures were up 0.07%, to $91.97 a barrel, after hitting $96 yesterday. 

The NATO allies are holding back some punitive measures as bargaining chips, which also means the door to diplomacy is still open. The Iran nuclear deal remains a possibility until it is not. The two factors will leave crude range-bound and hold Brent back from $100 for the time being. Prices jumped on worries that western sanctions on Russia for sending troops into two breakaway regions in eastern Ukraine could hit energy supplies, but the United States made it clear there would be no impact on energy exports.

Precious and Base Metals

Gold hit its highest in nearly nine months yesterday before pulling back as investors waiting for developments in the Ukraine crisis repositioned near the pivotal $1,900 an ounce mark. Spot gold was down 0.2% at $1,902.71 per ounce, having hit its highest since June 1 at $1,913.89. U.S gold futures settled 0.4% higher at $1,907.40. 

Elliott waves signal for Gold update

Wall Street's main indexes slumped as the prospect of harsh Western sanctions against Russia over its conflict with Ukraine kept investors on edge, while oil prices hit their highest level since 2014. The Biden administration could deprive Russia of a vast swath of low- and high-tech U.S. and foreign-made goods, people familiar with the matter told Reuters, if it further invades Ukraine. It's not surprising to see gold well supported in this environment given its traditional safe-haven play.

However, inflationary pressures have been a key driver of gold's performance over the last several weeks in its sideways to higher trend, and interest rate increases may not overshadow this trend. 

Elliott waves signal for Silver

Gold is considered a hedge against inflation and political risks. But interest rate hikes, especially by the Federal Reserve, tend to dim the appeal of bullion, which pays no interest. Analysts attributed gold's slight pullback to some profit-taking. Meanwhile, spot silver was up 1.1% at $24.19 an ounce after touching its highest in a month at $24.35. Palladium fell 0.8% to $2,368.84, having earlier reached its highest since Jan. 31 at $2,433. Platinum rose 0.1%to $1,075.09. 

Given the increased tensions with (key producer) Russia, it would stand to reason that there are concerns about the supply chain in the platinum group metals.

Elliott waves trading signal for Copper

Traditional Agricultures

Wheat futures surged six percent in the steepest daily jump in 3-1/2 years while corn rallied three percent on worries that an escalating conflict between Russia and Ukraine could disrupt grain flows from the key Black Sea export region. Soybeans climbed to a nine-month peak as soaring energy markets lifted soybean oil futures by more than four percent. Continuing concern about a South American crop shortfall due to poor weather added support. This is a supply-led market and the supplies are trapped whether it’s because of Russia-Ukraine or because of the drought.

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