New York: Oil prices soared and investors on Wall Street shifted more money out of stocks and into ultra-safe US government bonds Tuesday as Russia stepped up its war on Ukraine. Stocks fell as investors tried to measure how the conflict will impact the global economy. The S&P 500 index was down 1.5% as of 3:26 pm Eastern. The Dow Jones Industrial Average fell 576 points, or 1.7%, to 33,316 and the Nasdaq fell 1.5%. The declines add to the market's losses after a two-month skid for the S&P 500. The bigger moves came from the markets for oil, agricultural commodities, and government bonds. Oil has been a key concern because Russia is one of the world's largest energy producers. The latest bump in prices increases pressure on persistently high inflation that threatens households around the world. US benchmark crude oil jumped 8% to $103.41 per barrel, reaching the highest price since 2014.
Brent crude, the international standard, surged 7.1% to $104.97. The crisis in Ukraine prompted an extraordinary meeting of the International Energy Agency's board, which resulted in all 31 member countries agreeing to release 60 million barrels of oil from their strategic reserves. Russia's invasion of Ukraine has also put more pressure on agricultural commodity prices, which were also already getting pushed higher with rising inflation. Wheat and corn prices rose more than 5% per bushel and are already up more than 20% so far this year. Ukraine is a key exporter of both crops. Investors continued putting money into bonds. The yield on the 10-year Treasury fell sharply, sliding to 1.72% from 1.83% late Monday. It is now back to where it was in January. In February, it had crossed back above 2% for the first time in over two years. The 10-year Treasury yield is used to set interest rates on mortgages and many other kinds of loans. The conflict in Ukraine has shaken markets globally and added to worries about economic growth in the face of rising inflation and plans from central banks to raise interest rates.