PARIS (Reuters) – The New York Stock Exchange opened lower on Thursday, hit by heightened tensions around Ukraine, Kiev and its Western allies, the United States in the first place, accusing Russia of orchestrating an upcoming entered the war following exchanges of artillery fire between Ukrainian forces and pro-Russian separatists in eastern Ukraine.
In early trading, the Dow Jones index lost 253.33 points, or 0.73%, to 34,680.94 points and the broader Standard & Poor’s 500 fell -0.75% to 4,441.25 points.
The Nasdaq Composite lost 0.87%, or 122.97 points, to 14,001.12.
Artillery fire was heard on Thursday near breakaway areas in eastern Ukraine, where Ukrainian government forces and pro-Russian separatists accused each other of violating the ceasefire in force in the Donbas.
Added to this are American statements questioning the beginning of the withdrawal announced by Moscow of Russian troops massed near the Ukrainian borders. US President Joe Biden even considers the risk of a Russian invasion of Ukraine very high.
Russia has also expelled the United States’ deputy ambassador to Moscow, Bartle Gorman, while Washington has promised retaliation after this decision, according to the RIA news agency.
This news takes precedence over corporate earnings releases, causing the volatility index, also known as the “fear index”, to jump 8%.
In addition to geopolitical tensions, risk aversion is also fueled by fears of a faster-than-expected tightening of monetary policy by the US Federal Reserve (Fed). Minutes from its January meeting showed the institution believed it likely rates could rise at a “faster pace” than in the previous hike cycle launched in 2015.
The Fed, however, said it would make its decisions meeting by meeting, based on analysis of macroeconomic data.
US jobless claims rose more than expected last week to 248,000, as business conditions in the Philadelphia area deteriorated in February.
In values, the semiconductor manufacturer Nvidia dropped 4.2% despite a sales forecast for the current quarter above expectations. The stagnation of the margin compared to the previous quarter and the group’s exposure to cryptocurrencies raise concerns.
In the wake of Nvidia, Broadcom, Intel, Advanced Micro Devices, Texas Instruments, Micron Technology and Analog Devices fell 1.1% to 2%.
On the upside, network equipment maker Cisco Systems rose 3.3% on the announcement of a new share buyback plan and an increase in its profit forecast for the whole of the year.
Meal delivery specialist Doordash soared by more than 18% thanks to better-than-expected quarterly sales.
(Written by Claude Chendjou, edited by Sophie Louet)
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