US Stocks Fall by 597 Points as Oil Prices Skyrocket

Indices at the New York Stock Exchange fell sharply on Tuesday, driven down by a sharp spike in petroleum prices caused by Western sanctions against Russia for the latter's special operation in Ukraine.

At the closing bell on Tuesday, the Dow Jones was down by 597.65 points, a 1.76% decline, bringing it to 33,294.95. The S&P 500 fell by 67.68 points, a 1.55% decline, putting it at 4,306.26. The Nasdaq also fell by 1.59%, declining by 218.94 points, to finish at 13,532.46.

Crude oil prices crossed $100 a barrel on Tuesday, driven upward by expectations of lost supply from Russia, which has seen its economy targeted by punishing economic sanctions from NATO powers and their allies in recent days. Russia is the world’s largest exporter of fossil fuel products and the second-largest exporter of crude oil, after Saudi Arabia.

That price spike came despite a release of 30 million barrels from the US Strategic Petroleum Reserve by US President Joe Biden. On Tuesday, White House National Economic Council Deputy Director Bharat Ramamurti leaned on US oil producers to increase production.

The prices of other major Russian export commodities also spiked on Tuesday, including wheat futures, which hit the maximum 5.4% increase allowed by the Chicago Board of Trade, reaching $9.84 a bushel. According to CNBC, that is its highest price since 2008.

Other economic forces are also at play as US investors remain wary of rising inflation and the Federal Reserve's anticipated response of increasing interest rates. The price of gold rose by 1.9% on Tuesday, and the yield on the 10-year US Treasury note fell to 1.726% on Tuesday from 1.836% a day prior, due to investors expecting a weak response from the Fed, according to the Wall Street Journal.