Markets experienced volatility on Tuesday as tensions between Russia and the United States escalated. The Dow initially dropped about 450 points after the opening bell but later rebounded, down around 200 points or 0.5% in recent trading. Similarly, the S&P 500 and Nasdaq also recovered from early losses.
The increased volatility follows Moscow's decision to change its nuclear doctrine in response to the Biden administration granting Ukraine permission to use longer-range weapons against targets in Russia. This move has raised concerns among investors about the intensifying Russia-Ukraine conflict.
Notably, investors sought refuge in safe-haven assets such as gold and US Treasury bonds. Gold prices rose on Tuesday, while US Treasury rates dipped as investors reacted to the escalating tensions.
The situation further escalated when Ukraine reportedly fired US-made ATACMS missiles into Russia's Bryansk region, according to Russia's Defense Ministry. This action marked a significant escalation in the conflict, coming just days after the Biden administration authorized Kyiv to use longer-range American weapons against Russian targets.
Despite the turmoil in the markets, oil prices remained relatively stable on Tuesday morning. The ongoing developments in the Russia-Ukraine conflict have added a layer of uncertainty for investors, prompting some to reevaluate their positions.
Market strategists remain cautiously optimistic about the overall trend in the equity market, emphasizing that the recent news has provided a reason for the market to retrace some of its gains. The situation continues to evolve rapidly, and investors are closely monitoring further developments for potential impacts on global markets.
