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NEW YORK: US stock indexes tumbled more than 1% on Monday as the prospect of a ban on oil imports from Russia sent crude prices soaring and fueled concerns about spiraling inflation.

Eight of the 11 major S&P sectors were lower, with financial and technology sliding 2%. The energy index surged 2.5% to its highest since May 2015.

Countries from Japan to the United States discussed banning Russian oil imports in response to the country’s invasion of Ukraine, helping Brent scale $139 a barrel in the session, its highest since 2008.

“When you’ve got the combination of impacts from the COVID pandemic, heightened inflation to Russia situation, it’s a fix for heightened volatility,” said Greg Bassuk, chief executive at AXS Investments in Port Chester, New York.

“We’re very bullish on equities, but we’re cautioning investors to brace for a rough ride over the next few weeks.”

The CBOE volatility index, also known as Wall Street’s fear gauge, rose to 33.92 points after hitting an over one-week high earlier in the session.

Russia, which calls the campaign it launched on Feb. 24 a “special military operation”, has told Ukraine it is ready to halt military operations “in a moment” if Kyiv meets a list of conditions, the Kremlin spokesman said.

At 10:18 a.m. ET, the Dow Jones Industrial Average was down 358.68 points, or 1.07%, at 33,256.12 and the S&P 500 was down 50.95 points, or 1.18%, at 4,277.92.

The Nasdaq Composite was down 196.27 points, or 1.47%, at 13,117.17.

Bank of America fell 3.7%, dragging the S&P 500 banks index down 2.2%. Payment services providers Visa , American Express Mastercard lost nearly 4% after they suspended operations in Russia.

Cruise operator Royal Caribbean Cruises Ltd and carrier United Airlines Holdings Inc dropped 6.1% and 7.0%, respectively, to lead losses among travel companies, as the jump in oil prices threatens to again disrupt a nascent recovery.

Defense stocks L3Harris Technologies Inc, Northrop Grumman Corp and Lockheed Martin Corp gained between 3.3% and 4.6%.

Investors are awaiting US consumer prices report on Thursday, with a hotter reading likely to seal a Federal Reserve rate hike later this month.

Fed Chair Jerome Powell last week backed a 25-basis-point rate hike at the central bank’s March 15-16 policy meeting and would be “prepared to move more aggressively” later if inflation does not abate as fast as expected.

Traders now see a 99% probability of a 25 basis point rate hike by the Fed at its March meeting, while a 1% chance of no change in rates.

Declining issues outnumbered advancers for a 2.02-to-1 ratio on the NYSE and a 1.89-to-1 ratio on the Nasdaq.

The S&P index recorded 46 new 52-week highs and 35 new lows, while the Nasdaq recorded 48 new highs and 293 new lows.

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