Russia’s invasion of Ukraine failed to knock the major averages on Thursday, with the Dow, S&P 500 and Nasdaq Composite finishing the day with gains.
Overnight Thursday, Moscow launched the military action in Ukraine. There were reports of explosions and missile strikes on several key Ukrainian cities including its capital, Kyiv.
While stocks initially spiraled downward, the major average recovered. The Dow Jones Industrial Average rose more than points, after being down 859 points earlier in the session. The S&P 500 rose 1.5%, following a 2.6% drop and the Nasdaq Composite reversed a near-3.5% decline to close up 3.3%.
The S&P 500 is still in a technical correction and the Nasdaq is flirting with bear market territory, more than 16% from its record close.
President Joe Biden addressed Russia's invasion of Ukraine on Thursday, announcing that the U.S. will introduce a new wave of sanctions against Russia in a broad effort to isolate Moscow from the global economy.
Meanwhile, Russian President Vladimir Putin said Thursday that "Russia remains a part of world economy. We are not going to harm the world economy system we are a part of as long as we are a part of it."
While the Russia invasion "is really worse than a baseline expectation,” according to Binky Chadha, chief U.S. equity and global strategist at Deutsche Bank, some strategists believe geopolitical shocks to the stock market tend to be fleeting.
BMO’s chief investment strategist Brian Belski compiled a list of notable geopolitical conflicts in the past and found that the S&P 500 fared well following the tensions.
“Our work shows that U.S. stock market performance typically holds up pretty well during geopolitical shocks and any price weakness resulting from these events tends to be short-lived,” Belski said in a note.
