The Dow Jones Industrial Average records its first correction in 2 years and the Nasdaq slips into bearish territory

The slump for US stocks intensified earlier this week as the crisis in Ukraine deepened and investors weighed the prospect of new sanctions to cripple the Russian economy as the Kremlin waged war in Europe from the east.

In this context, the Dow Jones Industrial Average DJIA,
-2.37%
closed sharply lower on Monday, marking its lowest close of 2022 and ending in correction territory for the first time in more than two years.

A close below 33,119.685 was the level needed to mark a 10% decline from its January 4 high, meeting the commonly used definition of a correction. The Dow Jones closed Monday’s trade at 32,817.38.

The Dow last ended in a correction on February 27, 2020 and extended the decline into a bear market, defined as a drop of at least 20% from a recent high, at the height of the selloff fueled by the pandemic two years ago.

The Dow would join the S&P 500 SPX,
-2.95%
into corrective territory, as the general index entered on February 22 for the first time in two years.

An outbreak of CL.1 crude oil,
+3.73%,
as investors considered what next steps the White House might take to punish Moscow, raised concerns about a possible global economic downturn.

Read: What soaring crude prices mean for the US stock market, amid talk of Russian oil sanctions

Russia’s unprovoked invasion of Ukraine, now in its 12th day, has upended commodity markets and soured relations between the Kremlin and the West, with some Russian banks pulled from the network of SWIFT payment, a key mechanism for communicating global payments. Much of the Russian stock market remains closed such as the USDRUB ruble,
+34.27%
collapses.

The decline in US markets also pushed the Nasdaq Composite COMP,
-3.62%
in a bear market, defined as a 20% decline. Monday’s close left the tech-heavy index down 21% from its November 19 closing high.