Russo-Ukrainian crisis

Geopolitical worries have added another layer of volatility to an already-jumpy market as investors priced in the possibility of escalating conflict between Russia and Ukraine, though some doubted the issue would weigh on U.S. asset prices over the longer term. Reports of rising tensions between the two countries slammed stocks on Friday and lifted prices for Treasuries, the dollar and other safe-haven assets. Investors were already rattled by a hawkish turn from the Federal Reserve.

The market is reacting because an actual invasion has not yet been priced in," said Michael Farr of Farr, Miller and Washington LLC. "The severity of an invasion, if one occurs, will correlate to the severity of the market’s reaction." The United States and Europe stepped up their warnings of an imminent attack while the Kremlin, jostling for more influence in post-Cold War Europe, rejected a joint EU-NATO diplomatic response to its demands to reduce tensions as disrespectful.

U.S. officials, while pressing for diplomacy, said Russia could invade before the conclusion of the Winter Olympics on Feb. 20 and may seek to seize the capital Kyiv and other cities. Russia wants guarantees from the West, including a promise of no missile deployments near its borders, no NATO membership for Ukraine, and a scaling back of the alliance's military infrastructure.