By Yasin Ebrahim
Investing.com – The S&P 500 fell Tuesday, paced by a slump in banking stocks as Treasury yields slipped on safe-haven buying and a surge in oil prices dampened the economic outlook as Russia intensified its assault on Ukraine.
The S&P 500 fell 1.8%, the Dow Jones Industrial Average fell 2.2%, or 746 points, the Nasdaq fell 1.6%.Russia on Tuesday continued to advance on the Ukrainian capital Kyiv after reportedly launching a heavy assault in Kharkiv, the country’s second largest city.
Regional banks including SBNY, IVZ, and CVX led the selloff in financials as U.S. government yields, which trade inversely to prices, were under pressure as investors sought safety amid the ongoing Russia-Ukraine conflict.
The megacap bank stocks were also hit hard, with JPMorgan Chase & Co (NYSE:JPM) plunging to 52-week lows. Wells Fargo & Company (NYSE:WFC) and Bank of America Corp (NYSE:BAC) were down sharply.
As well as geopolitical tensions, U.S. Treasury yields have been pressured by expectations that the Federal Reserve isn’t likely to raise interest rates as aggressively as initially expected.
The odds of a 50 basis point has dropped to about 1% from 34% last week, according to Investing.com’s Fed Rate Monitor Tool.
U.S. oil prices rose above $100 a barrel for the first time since 2014 as potential supply disruptions from the ongoing geopolitical tensions offset the International Energy Agency’s release of 60 million barrels of oil from emergency reserves to ease rising prices.
APA Corporation (NASDAQ:APA), Chevron Corp (NYSE:CVX) and Occidental Petroleum Corporation (NYSE:OXY) were among biggest gainers, with the latter up more than 5%Big tech also kept the broader market lower as risk-off sentiment overshadowed a slump in U.S. rates, which tends to boost growth corners of the market such as tech.
With the exception of Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:FB) were about 1% lower.
On the earnings front, Target Corporation (NYSE:TGT) proved a big winner after delivering better-than-expected fourth quarter results, and guidance that suggests that the pace of growth was likely to continue post-pandemic.
Zoom Video Communications Inc (NASDAQ:ZM) fell 4% midday as quarterly results that beat on both the top and bottom lines were offset by the first quarter and full-year guidance that pointed to slowing normalizing demand for video conferencing software.RBC cut its price target on Zoom to $200 from $300 as guidance signaled a “material revenue deceleration,” but the bank kept its outperform rating on the stock amid expectations that “sentiment may be close to bottoming out.”
Lucid reported wider-than-expected loss as revenue fell short of estimates sending its shares more than 15% lower.
Economic data, meanwhile, showed U.S. manufacturing activity was stronger than expected in February, though supply-chain woes continue to persist.
“The data does not reflect too much progress in the struggle to rebuild inventories and clear order backlogs,” Jefferies said in a note.