Monday's Stock Market Open: US Equities Fall Despite OPEC Oil Output Cut Deal

Update 12:05 p.m. EDT:

U.S. stocks traded lower in noon Monday trading in a volatile session.

The Dow Jones Industrial Average dropped 464.04 points to 23,255.33, while the S&P 500 fell 47.33 points to 2,742.49 and the Nasdaq Composite Index tumbled 58.07 points to 8,095.51.

European markets were closed for the holiday.

Crude oil futures gained 1.36% at $23.07 per barrel, Brent crude rose 2.16% at $32.16

Original story:

U.S. stocks dropped at Monday’s opening despite an accord by the Organization of the Petroleum Exporting Countries and its allies to reduce oil production by a record 9.7 million barrels a day in order to shore up crude prices.

The Dow Jones Industrial Average dropped 110.7 points to 23,608.67, while the S&P 500 fell 13.83 points to 2,775.99 and the Nasdaq Composite Index tumbled 33.56 points to 8,120.02.

The OPEC-plus alliance agreed to reduce production by 9.7 million barrels per day, the single largest cut in output ever to save oil prices which have plunged more than 40% in early March when Russia and Saudi Arabia commenced a price war.

U.S. President Donald Trump praised the deal, citing it “will save hundreds of thousands of energy jobs in the United States.”

The U.S. now has 550,000 confirmed cases of coronavirus, the highest total of any country in the world, with more than 21,000 deaths.

But Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said he was cautiously optimistic the virus spread was slowing in the U.S.

“The various mitigation efforts to contain the spread of COVID-19 seem to be working. What comes next is very much up in the air,” said Marc Chaikin, CEO of Chaikin Analytics. “With the timing of the reopening of the economy now being debated and the economic effects of the engineered shutdown still to be determined, we urge investors to remain wary but watchful as events unfold.”

However, Federal Reserve Bank of Minneapolis President Neel Kashkari warned that in the absence of an effective therapy or a vaccine for the coronavirus, the U.S. may face 18 months of rolling shutdowns.

“We’re looking around the world. As they relax the economic controls, the virus flares back up again,” Kashkari said Sunday. “We could have these waves of flareups, controls, flareups and controls until we actually get a therapy or a vaccine. I think we should all be focusing on an 18-month strategy for our health care system and our economy.”

Overnight in Asia, markets were lower. China’s Shanghai Composite fell 0.49%, and Japan’s Nikkei-225 dropped 2.33%. Hong Kong’s Hang Seng market was closed Monday.

European stock markets were closed for Easter.

Crude oil futures gained 2.59% at $23.35 per barrel, Brent crude slipped 0.16% at $31.43. Gold futures fell 1.07%.

The euro slipped 0.26% at $1.0908 while the pound sterling gained 0.31% at $1.2486.