As the U.S. stock market opened Tuesday trying to avoid another day in the red, a new obstacle appeared overseas.
The Russian ruble continued to tumble Tuesday morning, following its worst session in 15 years Monday. Even a late-night action by the Central Bank of Russia (CBR) to raise interest rates failed to halt the slide.
While Americans slept Monday night, the CBR was hiking interest rates from 10.5 percent to an astounding 17 percent to try to reverse the ruble’s freefall. The ruble rebounded to about 60.00 against the U.S. dollar, but according to CNBC fell to a new record-low of 73.17 by this morning.
Of course, the X-factor in all of this is oil prices, as investors acknowledged that if the price of oil—Russia’s main export—continues to fall, there will be little that any central bank policy can do to help the situation. The Russian economy, already predicted to fall into recession in 2015, now faces what many experts feel is a ‘panic’ situation. Late in the day on Tuesday came news that President Barack Obama is likely to sign a bill approving additional sanctions against Russia by the end of the week, suggesting that this crisis is far from over.
On Wall Street, the markets moved lower off news of Russia’s troubles and further declines in oil this morning. The Dow moved into technical ‘pullback’ territory (defined as a reduction of at least 5% from previous highs) while the S&P 500 moved dangerously close to that level.
Here were the final numbers from Wall Street on Tuesday:
Dow Jones Industrial Average: 17,068.87 (-111.97)
NASDAQ: 4547.83 (-57.32)
S&P 500: 1972.74 (-16.89)