U.S. Markets React To Russia's 'Full-Scale Invasion' Of Ukraine

NEW YORK CITY — Experts say Americans will see "sustainably high" oil and gas prices after Russia invaded Ukraine overnight. The news comes as stocks tumbled in the U.S. and across the globe Thursday as bonds and oil soared.

Fear coursed through markets and pushed even more pressure on already high inflation, according to The Associated Press. The S&P 500 fell 2 percent and is now down almost 14 percent from its record high, set in early January. The Nasdaq 100 slid 3.2 percent, and European markets fell even further, with the German DAX down 5 percent.

Meanwhile, the price of oil soared above $100 a barrel and bond yields fell. Americans, already feeling pain at the pump, could see gas prices climb even higher, as well as at grocery stores. Prices of wheat and corn also jumped.

“Oil and particularly gas prices will now remain sustainably high,” Jefferies strategists said, according to Bloomberg. “Inflation pressures will mount further, forcing central banks into an ugly tightening cycle.”

Financial markets were in a "flight to safety and may have to price in slower growth" due to high energy costs, Chris Turner and Francesco Pesole of ING said in a report.

Russian military vehicles rumbled into the Kyiv region from Belarus to the north after tanks rolled into Ukraine from Crimea. The Kyiv government called the attack a "full-scale invasion" and declared martial law.

“The invasion is a worse scenario than some investors anticipated. That’s why we are seeing the negative reaction,” Keith Lerner, chief market strategist at Truist Advisory Services, told Bloomberg. “It caught some investors off-guard.”

The 27-nation European Union planned "massive and targeted sanctions" on Russia, the president of the European Commission said Thursday.

"We will hold President Putin accountable," Ursula von der Leyen said.

President Joe Biden denounced Russia's attack as "unprovoked and unjustified" and said Moscow would be held accountable. Many interpreted Biden's statement to mean Washington and its allies would impose additional sanctions. Putin accused them of ignoring Russia's demand to prevent Ukraine from joining NATO and to offer Moscow security guarantees.

Washington, Britain, Japan and the EU earlier imposed sanctions on Russian banks, officials and business leaders. Additional options include barring Russia from the global system for bank transactions.

Investors already were uneasy about the possible impact of the Federal Reserve's plans to try to ease inflation by withdrawing ultra-low interest rates and other stimulus that boosted share prices.

The dollar weakened to 114.69 yen from Wednesday's 114.98 yen. The euro fell to $1.1168 from $1.1306.

“This is a triple-hit to the global economy, with a toxic combination of higher inflation, lower economic growth, and greater uncertainty,” Ben Laidler, global markets strategist at eToro, said, according to Bloomberg. “The only silver lining is growth is strong, a buffer to any slowdown, and policymakers and investors already prepared for high inflation.”