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The Nasdaq sinks 3% and the S&P 500 is on track to confirm a correction

The US stock indices they fell on Monday, with the S&P 500 on track to confirm a correction, as the prospect of a Russian attack on Ukraine dealt a double whammy to investors already worried about the Federal Reserve’s aggressive monetary policy tightening.

A correction is confirmed when an index closes 10% or more below its recent high. The S&P 500 index is down 10.9% from its all-time high on Jan. 3.

All 11 major S&P sectors were lower in early trading, with nine losing more than 2% each.

The Russell 2000 index, of small caps and sensitive to the economy, fell 2.8%, down as much as 20.3% from its November 8 peak, putting it on track to confirm a bear market.

The US State Department announced Sunday that it has ordered relatives of its diplomats to leave Ukraine, as President Joe Biden weighed options to beef up military assets in Eastern Europe to counter a Russian troop surge. .

The order was one of the clearest signs that US officials are preparing for an aggressive move by Russia in the region.

A widely watched indicator of investor anxiety in US markets – the CBOE volatility index – last traded at its highest level since January 2021.

Ukraine is clearly a concern weighing on markets todaysaid Darren Schuringa, CEO of ASYMmetric ETFs in New York. “This will continue to weigh on the markets for the foreseeable future until there is some sort of clarity of some sort of outcome.”.

The Fed’s monetary policy meeting wraps up on Wednesday and the market will be paying close attention to concerns about rising inflation and the aggressiveness of the US central bank in trying to contain it.

Fed fund futures traders forecast a 25 basis point hike in March, plus three more interest rate wings by the end of the year.

The Dow Jones Industrial Average was down 744.95 points, or 2.17%, at 33,520.42; while the S&P 500 fell 120.17 points, or 2.73%, to 4,277.77 points. The Nasdaq fell 439.17 points, or 3.19%, to 13,329.75.

With information from Reuters

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