February 25, 2022
Global markets usually weaken as wars approach, strengthen long before wars end and treat human calamity with breathtaking indifference.
That‘s been a common historical pattern and it seems to be playing out with Russia’s invasion of Ukraine.
President Vladimir V. Putinof Russia has already rattled stock, bond and commodity marketsaround the world. On Tuesday, U.S. stocks stumbled, with the S&P 500 falling 1 percent, into what Wall Street calls a correction — a decline of least 10 percent from the most recent high.
The escalating conflict has shifted the value of mutual funds and exchange-traded funds in millions of retirement accounts, even for people who have not thought deeply about Eastern Europe and who have never invested directly in oil, gas or other commodities.
The near-term consequences for markets are relatively simple. Energy prices will keep rising, and equities will keep falling.
Rising oil and gas prices have bolstered the S&P 500s energy sector, the best performer this year, with a return of 21.8 percent through Monday. This came even as the overall index, which often serves as a proxy for the entire stock market, has fallen 8.8 percent.
Energy companies leading the S&P 500. And American investors have nearly $140 billion stashed in commodity E.T.F.s, mainly those focused on energy.
But the overall stock markethas been afflicted by multiple troubles: fears of rising interest rates, sizzling inflationand continuing supply-chain bottlenecks. Russian threats to Ukraine are likely to whipsaw the market further.
OneProSpecial Analyst
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