US close: Stocks extend losses as Biden bans importation of Russian oil

dl nyse new york stock exchange wall st street city finance dow jones nasdaq sp finance dollar dollars us usa united states of america 2 — New York Stock ExchangeSharecast photo / Josh White

Major indices recorded more losses on Tuesday as market participants remained cautious following yesterday's selloff driven by elevated oil prices.

At the close, the Dow Jones Industrial Average was down 0.56% at 32,632.64, while the S&P 500 was 0.72% softer at 4,170.70 and the Nasdaq Composite saw out the session 0.28% weaker at 12,795.55.

The Dow closed 187.74 points lower on Tuesday, extending losses recorded in the previous session after oil prices surged to a multi-year high amid the ongoing Russia-Ukraine war, heightening fears the conflict will slow the US economy and raise inflation.

West Texas Intermediate prices, which ended the previous session 3.2% higher, was up 4.38% late on Tuesday at $124.63 per barrel, while international benchmark Brent crude, which hit its highest price since July 2008 on Monday, was another 4.50% higher at $128.75 a barrel.

The increased commodity prices came as market participants continued to monitor developments of escalated geopolitical tensions between Ukraine and Moscow, with the former stating Moscow was attempting to manipulate the pair's ceasefire arrangement by allowing Ukrainian civilians to only evacuate to either Russia or Belarus.

The White House also updated president Joe Biden's schedule to include the announcement of additional steps that Washington will enact to "hold Russia accountable for its unprovoked and unjustified war on Ukraine". As part of his remarks, Biden banned imports of Russian oil to the country.

Treasury yields were also higher at the end of trading on Tuesday, with the yield on the benchmark 10-year Treasury note at around 1.842% as traders looked to shed bonds amid escalating inflationary concerns.

On the macro front, the National Federation of Independent Business' small business optimism index declined for a second consecutive month in February, dropping to 95.7, down from 97.1 in the previous month to the lowest seen since January 2021.

"Inflation continues to be a problem on Main Street, leading more owners to raise selling prices again in February. Supply chain disruptions and labor shortages also remain problems, leading to lower earnings and sales for many”, said NFIB chief economist Bill Dunkelberg.

Elsewhere, the US trade deficit widened to a record high of $89.7bn in January, up from an upwardly revised $82.0bn for December 2021 and ahead of market expectations for a print of $87.1bn. According to the Bureau of Economic Analysis, the heightened deficit comes as a result of an increased goods deficit of $7.1bn to $108.9bn, with soaring energy costs pushing imports to a record high and dragging the services surplus to $19.2bn. Imports increased 1.2% to a new record high of $314.1bn, while exports fell 1.7% to $224.4bn.

Lastly, wholesale inventories advanced 0.8% month-on-month to $799.9bn in January, according to the Census Bureau, bang in line with preliminary estimates and following an upwardly revised 2.6% increase in December. The advance marked the 18th consecutive month of gains, driven by increases in inventories of both durable and nondurable goods. On an annualised basis, wholesale inventories advanced 18.1% in January.

In the corporate space, US retailer Dick's Sporting Goods reported a record fourth-quarter showing on Tuesday and said it expects to see even more profit momentum following the all-important holiday trading period.

Dow Jones - Risers

Caterpillar Inc. (CAT) $210.00 6.76%
Chevron Corp. (CVX) $170.53 5.24%
Boeing Co. (BA) $173.80 2.74%
3M Co. (MMM) $145.40 1.48%
Walgreens Boots Alliance, Inc. (WBA) $47.47 1.02%
American Express Co. (AXP) $160.05 0.58%
Visa Inc. (V) $191.71 0.53%
Honeywell International Inc. (HON) $230.94 0.00%
Dowdupont Inc. (DWDP) $30.52 0.00%
Goldman Sachs Group Inc. (GS) $321.37 -0.16%