Feb 24, 2022 - Economy & Business

Putin's Ukraine invasion upends global markets

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

Stock, commodity and energy markets whipsawed on news of Russia's invasion of Ukraine.

Why it matters: The violent reaction of financial markets suggests investors think Russia's aggression could further unsettle a world economy struggling to recover from the pandemic.

By the numbers: The S&P 500 was down more than 2% at times in morning trading, before curtailing losses.

  • The benchmark index is down more than 7% this month, putting February on track to be the worst month for the market since the start of the pandemic in March 2020.

Our thought bubble: The most significant market impact of the invasion is in commodities markets, where Russia is a massive producer of a wide range of metals, grains and energy products.

The bottom line: Commodities prices, in the short term, will worsen the worldwide struggle with inflation. Over the longer term, the erratic behavior of Russia could force a major shift of global trade networks, prompting Europe, especially, to rely less heavily on Russian raw materials.

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