The SPDR S&P 500 (NYSE:SPY) traded higher by 0.6% as U.S. investors mostly shrugged off the latest aggressive military actions by Russian President Vladimir Putin.
What Happened? Putin has pledged to send an additional 300,000 troops to Ukraine, which includes calling Russian military reservists into active service. In a pre-recorded announcement, Putin ramped up his aggressive rhetoric against the West. Putin said the West "wants to destroy our country" but added Russia has "lots of weapons to reply," a seemingly thinly-veiled nuclear threat.
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Why It's Important: Putin also claimed Western nations were using Ukraine as a way to fight a proxy war with Russia, accusing them of turning Ukraine's people into "cannon fodder."
Russia has not yet declared war on Ukraine and is still referring to the invasion it launched in February as a "special military operation."
Meanwhile, a Russian lawmaker recently made comments on state TV about nuclear strikes on Britain and Germany, with the host suggesting Russia should have struck Queen Elizabeth II's funeral.
Putin's message comes after Ukraine appears to have successfully executed counteroffensive measures to regain lost territory from Russia in the northeast and south regions.
Russia has also reportedly installed its own officials in several occupied regions of Ukraine. Those officials in Donetsk, Luhansk, Kherson and Zaporizhzhia plan to hold referendums on joining Russia as soon as this weekend.
While all eyes on Wall Street are aimed at the Federal Reserve on Wednesday, an escalation of the war in Ukraine will likely continue to impact defense stocks and energy stocks. Here's a look at how several of these stocks reacted to Putin's comments on Wednesday:
- Exxon Mobil Corp (NYSE:XOM) was up 0.1%.
- Chevron Corporation (NYSE:CVX) was up 0.8%.
- ConocoPhillips (NYSE:COP) was up 1.2%
- Raytheon Technologies Corp (NYSE:RTX) was up 2.5%.
- Lockheed Martin Corporation (NYSE:LMT) was up 2.6%.
- Northrop Grumman Corporation (NYSE:NOC) was up 3.7%.
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WTI crude oil prices were up 0.4% to $84.34 on Wednesday, a somewhat muted reaction to the possibility of an escalation of the Ukraine conflict. Investors may be concerned more about the possibility the Fed will be unable to avoid a soft landing for the U.S. economy in its battle to get inflation under control. U.S. natural gas prices were down 0.2% on Wednesday morning.
The bond market is currently pricing in a 100% chance the Fed will raise interest rates by at least another 0.75% on Wednesday afternoon.
Benzinga's Take: The market doesn't seem to be taking Putin too seriously on Wednesday morning given the limited reaction in energy stocks and the overall S&P 500. The launch of a global nuclear war would certainly devastate the U.S. economy, but Wall Street appears to believe Putin is bluffing at this point.
Photo: Courtesy of Dmitry Terekhov and Antonio Marin Segovia on flickr
