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The major averages dipped on Tuesday as traders continue to monitor brewing tensions between Russia and Ukraine.

The Dow Jones Industrial Average dropped 90 points or 0.25%. The S&P 500 was off just 0.15%, and the Nasdaq Composite slipped by 0.45%. The U.S. stock market was closed Monday due to the President’s Day holiday.

Oil prices rose, with West Texas Intermediate futures jumping 4.5% to $95.19 per barrel. Energy stocks jumped in premarket trading with Exxon Mobil rising 1.8% and ConocoPhillips adding 2.8%.

Russian President Vladimir Putin said Monday that he would recognize the independence of two breakaway regions in Ukraine, potentially undercutting peace talks with President Joe Biden. That announcement was followed by news that Biden was set to order sanctions on separatist regions of Ukraine, with the European Union vowing to take additional measures.

Putin later ordered forces into the two breakaway regions.

U.K. Health Minister Sajid Javid said Tuesday that “the invasion of Ukraine has begun.” U.S. President Joe Biden has not yet used the word “invasion” to describe the current activity. The nation has also started targeted economic sanctions against five Russian banks and three wealthy individuals.

The news came after the White House said Sunday that Biden has accepted “in principle”to meet with Putin in yet another effort to deescalate the Russia-Ukraine situation via diplomacy. White House press secretary Jen Psaki said the summit between the two leaders would occur after a meeting between Secretary of State Antony Blinken and his Russian counterpart Sergey Lavrov.

The Russia-Ukraine conflict has put pressure on market sentiment recently, with the major averages posting back-to-back weekly losses. The Dow fell 1.9% last week, and the S&P 500 and Nasdaq Composite slid 1.6% and 1.8%, respectively.

“While Monday’s episode will have important implications for Russia’s political relations with foreign partners, a significant market event is likely avoided for the time being, but the trajectory in the coming weeks will be important to monitor from a rising market risk perspective,” said Ed Mills of Raymond James.

In early earnings action,Home Depotreported quarterlyprofit of $3.21 a share, three cents better than estimates, and said it sees earnings and revenue growth this year. Shares rose 1.4% in premarket trading.

Macy’spopped more than 7% in premarket trading after beating on the top and bottom lines of its quarterly results. Macy’s also authorized a new $2 billion share buyback program and announced a 5% dividend increase

In deal news,Houghton Mifflin Harcourtshares surged 14.4% after the company said it would be taken private by Veritas Capital in a deal worth $21 a share, representing a nearly 16% premium from Friday’s close. The deal is expected to be completed in the second quarter.

Traders are also keeping an eye on the Federal Reserve, as the U.S. central bank is expected to raise rates multiple times starting next month. Traders are betting that there is a 100% chance of a Fed rate hike after the March 15-16 meeting, with expectations tilting toward a 0.25 percentage point move,according to the CME Group’s FedWatch tool.

Expectations of tighter monetary policy have put pressure on stocks, particularly those in rate-sensitive sectors like tech, and have sent Treasury yield sharply higher to start 2022. The benchmark 10-year Treasury yield ended last week around 1.93% after briefly breaking above 2%. The 10-year began 2022 trading at around 1.51%.

“All eyes are on the Fed,” Strategas investment strategist Ryan Grabinski wrote in a note released Friday evening. “As of today, the market is expecting the Fed to raise interest rates at nearly every meeting this year. Despite that, we left Monetary Policy as Favorable for now because the Fed is continuing to purchase Treasuries (an accommodative policy action).”

Meanwhile, Wall Street is preparing for the tail-end of the corporate earnings season, with Home Depot and eBay among the companies set to report this week. It has been a solid earnings season thus far: Of the more than 400 S&P 500 companies that have posted fourth-quarter earnings, 77.7% have beaten analyst expectations, according to FactSet.