US stock indexes edged lower in volatile trading on Tuesday as investors assessed the impact of a potential ban on Russian oil imports by the West over its invasion of Ukraine.
US President Joe Biden is expected to announce the ban in remarks at 10:45 a.m. (1545 GMT) on Tuesday, while Politico reported that the United Kingdom would follow suit.
Although the United States is not a leading buyer of Russian oil, its allies are likely to come under pressure to wean their economies off Russian energy.
Brent crude prices extended a rally, surging past $130 per as investors remained on edge. “Higher oil prices mean less discretionary spending, which means less earning potential for companies. It’s not a good thing for consumers or companies,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
Seven of the 11 major S&P sectors advanced in early trading, with energy shares climbing 3.4%, up for the eight consecutive session.
Financials rose 0.1% after falling for three straight sessions. The banks index added 0.7% tracking US 10-year Treasury yields, which climbed above 1.80% after hitting a two-month low on Monday.
Stocks have struggled since the start of the year as concerns about the Russia-Ukraine crisis have deepened a sell-off initially fueled by expectations of the Federal Reserve tightening its monetary policy to fight inflation.
The Nasdaq on Monday ended down 20.1% from its Nov. 19 record high close, confirming the tech-heavy index has been in a bear market, according to a widely used definition.
“Nothing really has changed. It is a stair step down market,” said Sam Stovall, chief investment strategist of CFRA Research in New York.
“It adds to the nervousness of investors that we have the Nasdaq in bear market territory which is the high growth area and we haven’t even seen the Fed start to raise interest rates yet.”
At 09:59 a.m. ET, the Dow Jones Industrial Average was down 33.13 points, or 0.10%, at 32,784.25, the S&P 500 was down 9.29 points, or 0.22%, at 4,191.80, and the Nasdaq Composite was down 51.56 points, or 0.40%, at 12,779.40.
In Ukraine, Kyiv accused Moscow of shelling a humanitarian corridor it had promised to open to let residents flee the besieged port of Mariupol.
Caterpillar Inc jumped 4.8% after Jefferies upgraded the construction equipment maker’s stock to “buy” from “hold” as a hedge against inflation and prospects of more investments.