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The Russian operation in Ukraine triggered soaring oil prices and investors to shift money into ultra-safe US government bonds. The oil prices surged above $100 a barrel after Russia faced economic damage and isolation. 

The rush into Treasuries pulled the 10-year Treasury yield back to 1.77%, where it had been since early February. On Wall Street, stock prices were mixed in the early going. In the opening few minutes of trade, the S&P 500 fluctuated between tiny gains and losses. The European stock markets were down.

US markets were threatened with decline on Thursday after Russian and Ukrainian talks were aimed at ending the conflict but only yielded an agreement to meet again. 

On Wall Street, both the S&P 500 and the Dow industrials slipped 0.7%. The major European indices all sank sharply, while Asian stocks mainly increased. Oil prices are continuing to rise, with benchmark crude in the United States surpassing $100 for the first time since the summer of 2014.

A five-hour session of discussions ended with an agreement to meet again in the coming days, while Ukrainian President Volodymyr Zelensky said the Russian operation intends to "push him to make concessions."

Russia is a significant energy provider, and rising oil prices, as well as increasing financial pressure from the United States and its allies on Russia for its operation in Ukraine, have added to global economic turmoil.

“While the ceasefire talks at the Belarus-Ukraine border ended, the military fires certainly have not ended by any means alongside sanctions being raised further,” Tan Boon Heng at Mizuho Bank in Singapore said in a commentary.

France’s CAC 40 lost 3% while Germany’s DAX shed 2.7%. Britain’s FTSE 100 fell 1.3%.

Japan’s benchmark Nikkei 225 gained 1.2% to finish at 26,844.72. Australia’s S&P/ASX 200 surged 0.7% to 7,096.50. Hong Kong’s Hang Seng added 0.2% to 22,761.71, while the Shanghai Composite rose nearly 0.8% to 3,488.83. Markets were closed in South Korea for a holiday.

“The market’s focus will continue to be on geopolitical tensions, at least in the short term,” Anderson Alves of ActivTrades said in a report.

The Russian ruble hit a new low on Monday as Western countries decided to prevent some Russian banks from using a major global payment system. The US Treasury Department also imposed new penalties against Russia's central bank on Monday.

The ruble was trading at 97 to the dollar on Tuesday, up more than 10% from the previous day's low of 108.02 per dollar. After closing early on Monday, Russian markets remained closed on Tuesday.

Governors and lawmakers in a number of US states were taking steps to remove public pension and treasury assets out of investments in Russian-owned firms or Russian companies supporting the operation, in an effort to increase the financial pressure on Russia.

Due to the conflict, a number of corporations have announced plans to scale back or withdraw from enterprises in Russia, as well as cease activities in Ukraine.

Investors already were on edge before Russia’s operation in anticipation of the Federal Reserve’s plans to reach the highest interest rates for the first time since 2018 to counter inflation.

The Fed is walking a tightrope, needing to raise rates just enough to keep inflation in check but not enough to send the economy into a tailspin. Higher interest rates exert downward pressure on a variety of assets, including equities and cryptocurrencies.

The situation in Ukraine is fueling concerns that the Fed and other central banks may have to raise interest rates more gradually than previously anticipated.

Investors seeking safer yields have poured money into US government bonds. The 10-year Treasury yield decreased 0.15% points to 1.83% on Monday, the lowest level since the omicron coronavirus type first alarmed markets.