By DAMIAN J. TROISE and ALEX VEIGA AP Business Writers
Technology companies led a broad slide for stocks on Wall Street in afternoon trading Thursday, as renewed fear that Russia would invade Ukraine put global financial markets on edge.
The S&P 500 fell 2% as of 3:09 p.m. Eastern, on pace for its first loss in three days. The Dow Jones Industrial Average fell 595 points, or 1.7%, to 34,337 and the tech-heavy Nasdaq composite fell 2.6%. The losses wiped out the major indexes’ weekly gains.
More than 85% of the stocks in the benchmark S&P 500 were in the red. The technology sector was the biggest drag on the index, along with communication stocks and companies that rely on consumer spending. Microsoft fell 2.6%, Facebook parent Meta slid 3.4% and Nike fell 2.4%.
Bond yields fell and dragged banks lower. The yield on the 10-year Treasury fell to 1.97% from 2.04% late Wednesday. Bank of America shed 3.6%.
Markets in Europe, which have been particularly sensitive to tensions in Ukraine, closed broadly lower.
The wave of selling came as President Joe Biden warned that Russia, which is believed to have built up some 150,000 military forces near Ukraine’s borders, could invade within days. Dignitaries raced for solutions but suspicions between East and West only seemed to grow, as NATO allies rejected Russian assertions it was pulling back troops from exercises that had fueled fears of an attack.
Markets have been unsettled all week by tensions in Ukraine. The potential for a military conflict in Europe has made for volatile trading in energy markets. Russia is a major energy producer and a military conflict could disrupt supplies and jolt markets. U.S. crude oil prices fell 2%, while the price of natural gas fell 4.9%.
The price of gold, traditionally a safe haven during geopolitical uncertainty, rose 1.6%.
Geopolitical tensions in Europe have only added to worries investors face as the Federal Reserve prepares to raise interest rates to fight persistently rising inflation.
Wall Street has been looking for clues about how much and how quickly the central bank will begin raising interest rates. The minutes from the latest meeting of Fed officials released on Wednesday showed that most policymakers suggested that a faster pace of increases in the benchmark short-term interest rate “would likely be warranted.”
Inflation has spiked to a 40-year high and companies have been dealing with supply chain problems and higher costs by raising prices on finished goods for consumers. Many have also warned investors that profits, sales and overall operations will still be hurt by inflation.
The move to raise prices on goods has heightened concerns that consumers could eventually pull back spending, which could damage economic growth. Consumers haven’t pulled back yet, though, according to latest report from the Commerce Department showing that retail sales surged 3.8% in January as the threat of the omicron variant of COVID-19 faded.
Wall Street is also reviewing the latest round of corporate report cards. Walmart, the world’s largest retailer, rose 3.4% after reporting strong fourth-quarter financial results. Cisco Systems, which makes routers, gained 3.3% after raising its profit forecast for the year.
