Wall Street recovered after the winds of war rekindled by the statements of Russian President Vladimir Putin and the sanctions against Russia announced by Joe Biden caused such losses that the S&P 500 index slipped into a correction phase. Yesterday the announcement of the American sanctions against Putin’s Russia resulted in an acceleration of sell-offs on the markets.
Wall Street closed the session with a steep decline.
The Dow Jones lost 483 points (-1.42%), suffering the fourth consecutive session of declines. In intraday lows, the DJ capitulated to over 700 points. The S&P 500 lost 1.01%, closing 10.25% lower than its record close on January 3, so the index is technically in the process of correction. The Nasdaq Composite fell 1.23%, down for the fourth consecutive session.
Today at around 4pm Italian time, the Dow Jones, the Nasdaq and the S&P 500 collect gains of between 0.30% and 0.43%, continuing to confirm the presence of a certain caution.
The latest news from Ukraine is holding back the buy, with President Volodymyr Zelenskyy calling Moscow’s latest maneuvers “an act of aggression against Ukraine, its sovereignty and integrity”, calling for “a response from international community to this crime decided, hard and immediate “. Zrelensky also reiterated Kiev’s desire to join the EU and NATO.
For its part, the Russian Foreign Ministry issued a statement on its official Facebook page, declaring the sanctions imposed by the United States against Russia “ineffective and counterproductive for America’s own interests”.
“Russia has demonstrated its ability to minimize the losses resulting from these sanctions. Still, the pressures from the sanctions will not affect our determination to defend our interests,” the statement read.
Yesterday, US President Joe Biden announced the first package of sanctions against Russia, after Russian counterpart Vladimir Putin recognized the independence of the two breakaway republics of Donetsk and Lugansk, in Ukraine’s Donbass. Putin also ordered the sending of Russian forces to the area.
In a speech delivered yesterday evening, Biden announced the decision to impose sanctions against some Russian financial institutions, Moscow’s sovereign debt and some representatives of the Russian elite, including members of their families.
The official reason for the sanctions was pointed out by the president himself:
“This is the beginning of the Russian invasion of Ukraine. Consequently, I will begin as a response to impose sanctions.” Biden again: “Who, in the name of God, thinks of giving Putin the right to declare those present in the territories belonging to his neighbors ‘new countries’? This is a flagrant violation of international law, which requires a decisive response from part of the international community “.
Focus in particular on the two Russian banks affected, VEB and PSB, the latter military bank of Russia, and on Russian bonds, which have become practically pariah debt.
Both Biden and Europe have in fact decided to impose a ban on Russian bond access to US and European markets.
The American president announced that, precisely, “we are putting in place large sanctions on Russian sovereign debt. This means that we are cutting the Russian government out of Western funding”. And this means that “(Moscow) will no longer be able to raise funds from the West and will not be able to exchange its new debt on our markets, and not even on European markets”.
In the last few hours, Putin remarked that “Russia’s interests are not negotiable”.
European sanctions against Russia are expected to arrive late today.
The Guardian reports that, if approved, EU sanctions will result in an asset freeze and travel ban affecting 23 people. Also hit three banks. Brussels is also ready to sanction the 351 members of the Duma who voted in favor of recognizing the independence of the two republics of Donetsk and Lugansk.