Stocks Drop as Oil Near $105 Fuels Inflation Scare: Markets Wrap

A surge in oil sent shivers through risky assets Tuesday, reversing an early recovery in American stocks and sending some European markets down 4%. Bonds rallied amid concern about the impact of war on global economies, with 10-year U.S. yields posting their worst four-day drop since December.

In the final moments of trading, the S&P 500 sank more than 2% as Apple Inc. said it has halted product sales in Russia. The equity gauge rebounded from session lows, while closing down for a second straight day. Crude traded near $105 a barrel, raising fears about potentially higher inflation that could complicate the Federal Reserve’s job at a time when Russia’s invasion of Ukraine is seen as a threat to global growth. Bonds climbed, with swaps linked to the Fed’s March 16 meeting dwindling to 22 basis points of tightening. That suggests traders don’t even expect a full quarter-point hike -- a contrast from last month, when a half-point move was all but fully priced.