Biden ratchets up Russia sanctions as West fears fall of Kyiv

President Joe Biden imposed stiff sanctions on Russia over its invasion of Ukraine as Western nations warned that Kyiv could fall within hours.

As Russian tanks, troops and aircraft pushed closer to Ukraine's capital city, Mr. Biden, speaking to the nation from the White House, promised to inflict a "severe cost on the Russian economy" that will hamper its ability to do business in foreign currencies.

"This is a dangerous moment for all of Europe," Mr. Biden said, adding that the "next few weeks and months will be hard on the people of Ukraine."

The Russian military effectively eliminated Ukraine's air defenses and rapidly advanced across the neighboring country, meaning Ukraine's capital could quickly be overrun as well, a senior Western intelligence official said.

After weeks of warnings that an attack would bring about a "massive" economic response, Mr. Biden announced that the U.S. would sanction Sberbank — Russia's largest lender — and four other financial institutions that represent an estimated $1 trillion in assets, as well as a broad swath of Russian elites and their family members.

"The sanctions we imposed exceed anything that's ever been done," Mr. Biden said. "The sanctions we imposed have generated two-thirds of the world joining us. They are profound sanctions."

The U.S. will also implement export controls designed to cut Russia off from semiconductors and other advanced technology crucial to the military, biotechnology, and aerospace industries. Rules allow the U.S. to restrict exports to Russia from anywhere in the world using American technology, including software.

The U.S. also plans to impose new restrictions on Russia's largest state-owned enterprises, blocking them from raising money from U.S. and European investors, Mr. Biden said.

But Russia will not be barred from the SWIFT international banking network because Europe opposed that action, Mr. Biden said. But the sanctions imposed Thursday against major Russian banks should have a similar effect and limit Russia's ability to do business in dollars, euros and pounds, he said.

The U.S. leader said sanctions were a long-term tool to pressure Russian President Vladimir Putin and were never expected to prevent an attack. The penalties will "take time," adding "he's going to test the resolve of the West to see if we stand together and we will."

But in launching Russia's most sweeping military action in decades, Mr. Putin has defied global condemnation and new rounds of sanctions. Mr. Putin has threatened other countries that may interfere with his Ukraine offensive with historic consequences.

Mr. Putin's audacity is a troubling development for Mr. Biden and European allies. The stakes are high for Mr. Biden, who has promised to uphold the post-war geopolitical order that Russia's offensive now threatens.

The Nasdaq 100 index fell into a bear market and then staged a comeback Thursday, in a volatile session that saw traders swing between fears on the long-term impact of Russia's invasion to Ukraine and hopes the Federal Reserve may be less aggressive in tightening policy amid heightened geopolitical risk.

The technology-heavy index climbed 2.4% as of 3:08 p.m. in New York, extending gains after Mr. Biden imposed sanctions on Russia. The index had fallen as much as 3.3% following the opening bell. Those initial losses had pushed it into bear-market territory, which is measured as a decline of 20% or more for a stock index from a recent high. The index now sits about 17% away from its Nov. 19 record.

Markets tumbled around the world. The invasion is the latest risk to hit markets, following growing expectations for a rise in rates and persistent inflation, factors that have largely hit high-growth names.

But the odds that the Fed will lift borrowing costs by 50 basis point in March retreated Thursday, according to Bloomberg data, which may ease the strain on tech and growth stocks, whose elevated valuations become targets as borrowing costs rise. The central bank typically moves rates in increments of 25 basis points.