The harsh reality of a stock trader in early 2022 includes being unaware of when and where new panic can hit markets. One day, they might remain stable amid negative COVID-19 news, but the next they could grow on a low-key US Federal Reserve meeting. However, what no trader expected this year was to be tricked by a sarcastic statement made by the Ukrainian president on 14 February.
Addressing the ever-increasing hysteria in the media about an "imminent" Russian invasion, President Volodymyr Zelensky attempted to calm down his compatriots by mocking unsubstantiated media reports of 16 February being the day Moscow would go through with its "invasion plans". What he probably did not expect was that his words would be wrongly (and too seriously) understood by investors.
"We are told that 16 February will be the day of the attack. Let's make it the day of the unification [of the Ukrainian people]", Zelensky said in his statement, apparently mocking the grim forecasts of the "imminent" invasion, the accuracy of which he had recently repeatedly questioned.
Because of how the president’s remarks were translated, investors apparently understood them as a sign that Kiev had received intelligence from its Western allies that an invasion would start on 16 February, Bloomberg reported, citing analysts.
"It’s been a crazy day after a crazy week. We are dealing with very twitchy markets. Geopolitical tensions come with lots of dramatic headlines", the founder of Tallbacken Capital Advisers, Michael Purves, told the news agency.
Soon after Zelensky's statement, the S&P 500 index took a dive at around 2pm (New York time), dropping by 1.2% and likely triggering a lot of stop-loss orders for traders. Oil, in turn, jumped, breaching the $95 per barrel ceiling over fears of fuel shipment disruptions and shortages.
Zelensky's adviser Mykhailo Podolyak later clarified his remarks, stressing that the president had spoken ironically and remained sceptical about reports of "concrete dates" for a Russian invasion. Following his explanation, the S&P 500 bounced back, still closing in the red, but only by 0.4% compared to the previous day. Oil, in turn, fell back below $95 per barrel.
Russia has repeatedly denied having plans to invade Ukraine, either now or in the future. Moscow defended its right to redeploy troops within its territory as it sees fit, as Western countries condemned the deployment of troops near Ukraine's border. According to the Kremlin, the troops were brought in for scheduled drills, and some of them will later return to their home bases.