By Geoffrey Smith
Investing.com -- U.S. stock markets opened sharply lower again on Monday, as fears of an imminent war in Ukraine added to more familiar worries about rising interest rates and stretched valuations.
By 9:40 AM ET (1440 GMT), the Dow Jones Industrial Average was down 419 points, or 1.2%, at 33,846 points. The S&P 500 was down 1.5%, and the NASDAQ Composite, which fell over 7.5% last week alone, was down another 1.8%. Like the NASDAQ, the S&P 500 is now down more than 10% from its 2021, a decline that traditionally qualifies as "correction territory."
Over the weekend, the U.S. had instructed the families of its diplomats living in Ukraine to leave the country, seeing a sustained high risk of invasion by Russia, which has massed over 100,000 soldiers on its side of the border with Ukraine since late last year. Russia's Foreign Minister Sergey Lavrov had said at talks with his counterpart Anthony Blinken last week that Russia has no intention of sending troops into Ukraine, but a Kremlin spokesman said on Monday that Russia expected Ukraine's government to attack the two Russian-backed breakaway republics in eastern Ukraine imminently - comments which immediately raised fears that the country would use such an incident to justify invading.
Geopolitical tensions are merely compounding more prosaic fears about the market at the start of a week that will be dominated by the Federal Reserve's meeting, which ends on Wednesday. While the consensus is still for no change to monetary policy until the next meeting in March, the market's reaction is likely to be highly sensitive to any hints in the central bank's guidance that would suggest it feels it is still 'behind the curve' in tackling runaway inflation.
Once again, the cohort of 'profitless tech' and other innovation-themed stocks was prominent in leading the declines, with Roblox (NYSE:RBLX) stock down 4.6%, Airbnb (NASDAQ:ABNB) stock down 7.8% and Netflix - which had already lost over one-fifth of its value last week in response to a warning of slower subscriber growth - falling another 6.8%.
Coinbase (NASDAQ:COIN) stock, meanwhile, was down 9.4%, tracking the slump in the value of the cryptocurrencies whose trading it hosts. Bitcoin tumbled to its lowest in six months before recovering a little to trade down 4.6% at $33,747.
However, the selling also engulfed more profitable, defensive technology stocks, with Alphabet (NASDAQ:GOOGL) Class C (NASDAQ:GOOG) stock down 2.5%, Microsoft (NASDAQ:MSFT) stock down 2.1%, Amazon (NASDAQ:AMZN) stock down 1.6% and Apple (NASDAQ:AAPL) stock down 1.9%.
Tesla (NASDAQ:TSLA) stock, the largest and most liquid holding in many innovation-themed portfolios - including those of Cathie Wood's ARK Innovation ETF (NYSE:ARKK) - fell 8.1% amid signs of forced liquidations. ARK Innovation itself fell another 4.3%, to its lowest in 19 months.
One stock successfully bucking the trend was Kohl's (NYSE:KSS), which rose over 31% after reports that private equity group Sycamore Capital had made an offer for the struggling department store chain. That adds to the growing list of investors that have either expressed an interest in it or have agitated aggressively to improve shareholder returns there.