Brent crude, the global oil standard, fell nearly 12% in late trading on Wednesday to around $113 a barrel.
Inventories remain sharply low so far in March, adding to losses earlier in the year. The Dow is down more than 8% so far in 2022, the S&P 500 is down 10% and the Nasdaq is down 15%.
In addition to concerns about Russia and Ukraine, traders are trying to figure out the next move for markets and the broader economy now that the Federal Reserve is preparing to raise interest rates to fight high inflation. Higher rates can eventually lead to a negative impact on earnings.
But investors are also betting that higher rates, as long as the increases are gradual, will actually boost earnings for some sectors, most notably financial stocks. Banks rose sharply on Wednesday.
Wall Street also appears to be hoping that once the initial shock of the Russian invasion and the resulting spike in oil prices wears off, investors and consumers may see that the US economy is still in good shape.
“The feeling seems to be that most of the bad news is currently priced in, and with the S&P near a nine-month low, it’s time to get off the margin and not just fish the bottom, the number of names is down more than 50% from what’s going on,” said Louis Nevelier. , chairman and founder of Navellier & Associates, in a report on Wednesday “Rises But Just For Long-Term Stocks In General.”