NEW YORK — Stocks fell around the world on Thursday after Russia’s attack on Ukraine sent fear through markets and added pressure on high inflation that is already squeezing the global economy.

On Wall Street, the S&P 500 fell 1.5% to continue its dismal start to the year, although the loss moderated after starting the day at 2.6%. The benchmark is now down 13.3% from its record high set earlier this year. Stocks in Europe fell even further after officials called Russia’s shares a “brutal act of war” as Germany’s DAX fell 4%.

Beyond its human toll, the conflict is expected to drive prices even higher at gas pumps and grocery stores around the world. Russia and Ukraine are major producers not only of energy, but also of grain and various other commodities. The war could disrupt global supply, as could sanctions imposed by the United States and other allies.

Oil prices on both sides of the Atlantic jumped towards or above $100 a barrel to their highest levels since 2014, up around 6%. Wholesale prices also rose for fuel oil, wheat and other commodities. Europe’s spot price for natural gas, for which the continent depends on Russia for supply, jumped 31%.

Rising energy and food prices could amplify worries about inflation, which in January hit its highest level in the United States for a few generations, and what the Federal Reserve will do next. to contain it. The Fed appears certain to scrap the super-low interest rates that investors love, which has also helped propel financial markets and the economy out of their coronavirus-caused plunge. The only question has been how quickly and how aggressively the Fed will act, starting next month.

Stocks pared losses through Thursday morning as investors wondered if Russia’s aggression might make the Fed less aggressive in raising rates. In the past, he has delayed major policy decisions amid uncertainty over the Kosovo war and the US invasion of Iraq, for example, according to Goldman Sachs.

But the bank’s economists say they still expect the Fed to raise rates steadily at its upcoming meetings. The tensions in Ukraine probably make it less likely that the Fed will start the process with a larger-than-usual rate hike, which a few Fed officials had suggested.

Many investors also said that past world events, such as an invasion, had only short-term effects on the markets that lasted a few weeks or months.

Either way, bond yields have since fallen around the world, a sign that investors were rushing into anything that could offer safer returns than stocks and other riskier bets. The yield on the 10-year US Treasury fell to 1.92% from 1.97% on Wednesday evening. Gold also rallied and rose 0.5%, continuing its strong run on concerns over Russia and Ukraine.

On Wall Street, concerns about rising interest rates have dealt the heaviest blows to big tech stocks, a turnaround after those companies surged to pull Wall Street out of its coronavirus-caused slump in 2020.

The Nasdaq composite, which is packed with big tech stocks, fell 1% and could close more than 20% below its Nov. 19 high. If so, it’s something Wall Street calls a “bear market,” something that hasn’t happened for the Nasdaq since the coronavirus plunged the global economy for the first time. first time.

The Dow Jones Industrial Average fell 698 points, or 2.1%, to 32,433 as of 10:32 a.m. EST.

Financial markets are in a “flight to safety and may have to factor in slower growth” due to high energy costs, ING’s Chris Turner and Francesco Pesole said in a report.

In Brussels, the President of the European Commission said Thursday that the European Union of 27 was planning “massive and targeted sanctions” against Russia.

“We will hold President Putin accountable,” said Ursula von der Leyen.

The FTSE 100 in London fell 3.3% after Europe woke up to news of explosions in the Ukrainian capital of Kiev, the major city of Kharkiv and other areas. The CAC 40 in Paris lost 3.7%.

The Moscow Stock Exchange briefly suspended trading in all of its markets on Thursday morning. After trading resumed, Russian indices plunged by more than a third.

Some analysts expect the conflict to push investors out of many tech stocks, with the exception of the cybersecurity sector.

“Growing concern that a massive cyberwar could occur in the near term, which would certainly catalyze increased spending on preventing sophisticated Russia-based cyberattacks,” Wedbush Securities analysts wrote in a note to clients.

Putin said Russia needed to protect civilians in eastern Ukraine, a claim Washington predicted it would make to justify an invasion.

President Joe Biden denounced the attack as “unprovoked and unwarranted” and said Moscow would be held accountable, which many took to mean that Washington and its allies would impose additional sanctions. Putin accused them of ignoring Russia’s request to prevent Ukraine from joining NATO and offering security guarantees to Moscow.

Washington, Britain, Japan and the EU have previously imposed sanctions on Russian banks, officials and business leaders. Other options include excluding Russia from the global banking system.

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AP Business Writers Christopher Rugaber and Joe McDonald contributed.