Wall Street Edges Down As China Boosts Tesla

All three major US stock indexes dropped sharply after US Secretary of State Antony Blinken announced the relocation of US diplomatic operations to western Ukraine, in a possible sign of an imminent Russian invasion.

By the closing bell, the Dow Jones Industrial Average joined the S&P 500 in negative territory, while the Nasdaq Composite Index ended essentially unchanged.

Ongoing concerns over aggressive policy from the Federal Reserve also have contributed to recent market volatility.

"There's a lot of cross currents, a lot of potential negatives in the markets," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Geopolitical anxieties have been simmering in recent weeks as negotiators scrambled to find a diplomatic path forward as Russia amassed troops along the Ukrainian border.

Still, market fallout due to geopolitical turmoil tends to be fleeting, according to historical data.

"History actually tells investors that military and terrorist strikes tend to have short-lived shocks because they do not result in global recession," said Sam Stovall, chief investment strategist of CFRA Research in New York.

Adding to the uncertainty were increasingly hawkish comments from St Louis Federal Reserve President James Bullard. He reiterated his call for a faster rake hike timeline and said the central bank's "credibility is on the line" in its battle against rising prices.

The Dow Jones Industrial Average fell 0.49 percent, to 34,566; the S&P 500 lost 0.38 percent, at 4,401.67; and the Nasdaq Composite dropped less than a point to 13,791.

Tesla advanced 1.8 percent after Chinese auto industry authorities announced the electric car maker sold nearly 60,000 China-made vehicles in January. (Reuters)