Stocks plunge as rising oil, wheat prices shake market

Stocks fell sharply Monday as the economic fallout of Russia’s war in Ukraine rattled investors.

The Dow Jones Industrial Average fell almost 800 points Monday to close with a loss of 2.4 percent. The Nasdaq composite plunged 3.6 percent lower and the S&P 500 index closed with a loss of 3 percent.

Companies in the finance, travel, entertainment, retail and construction industries fell sharply Monday as skyrocketing oil prices raised fears of an economic slowdown, while energy companies rallied on the prospect of higher prices.

Stocks have fallen for weeks amid rising concern about inflation and the economic blowback of the invasion of Ukraine. The Dow is down 10.3 percent, the S&P is down 12.4 percent, and the Nasdaq is down 19 percent since the start of 2022.

Prices for oil, natural gas and wheat have also risen dramatically after the U.S. and allies imposed unprecedented sanctions on the Russian economy, which could limit their access to key Russian exports.

Economists have warned that higher energy and food prices will likely slow growth in the U.S. through the first half of the year and fuel higher inflation. Prices rose 7.5 percent over the 12 months ending in January, according to Labor Department data, the highest rate in more than 40 years.

President Biden is also under growing pressure from lawmakers and leaders in both parties to ban Russian energy imports and target a major source of wealth for the Kremlin.

While Russia’s economy has already begun to crumble under sanctions imposed by the U.S. and allies, its oil and gas sector has been largely exempted from the penalties.