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By: and
Published: Feb 24, 2022 8 min read
Collage of Joe Biden and Vladimir Putin with a ripped hundred dollar bill in the background
Money; Getty Images

As tensions escalate between Russia and Ukraine over international borders and sovereignty, consumers in the United States could soon feel an impact on their wallets.

Global markets tumbled following Russian forces' invasion of Ukraine early Thursday, with stock market indexes like the S&P 500 down 2.2% shortly after the open and the Dow Jones Industrial Average down 2.5% (more than 800 points). The tech-heavy Nasdaq entered bear market territory for the first time since 2020.

Meanwhile, oil prices surged past $100 per barrel. Yields on the 10-year U.S. Treasury note dipped below 1.9%, and the price of gold popped 0.8% on Thursday after steadily rising for weeks as investors flooded into safe-haven assets.

All of that movement in the markets was triggered in part by anxiety surrounding new sanctions announced by the White House against Russia — and by the possibility that more sanctions are likely if the conflict continues.

Russia is a major oil supplier, meaning sanctions on the country could have ripple effects around the world. Although the conflict is oceans away — and at this point, nobody knows exactly what's going to happen — Americans will likely feel the pinch in their wallets thanks to rising energy prices and an uncertain global economy, says Kathy Bostjancic, chief U.S. economist at Oxford Economics.

How do sanctions work?