Tuesday's Stock Market Open: US Equities Drop As Oil Prices Remain In Negative Territory

Update: 12:05 p.m. EDT:

U.S. stocks incurred steeper losses as of noon Tuesday.

The Dow Jones Industrial Average dropped 612.09 points to 23,038.35, while the S&P 500 fell 83.74 points to 2,739.42 and the Nasdaq Composite Index tumbled 296.18 points to 8,264.55.

In Europe markets finished lower, as Britain’s FTSE-100 fell 2.96%, France’s CAC-40 tumbled 3.77% and Germany’s DAX dropped 3.99%.

Crude oil futures surged 110.36% at $3.90 per barrel, Brent crude plunged 25.42% at $19.07.

Original story:

U.S. stocks plunged on Tuesday as crude oil futures continued their unprecedented sell-off.

The Dow Jones Industrial Average dropped 526.52 points to 23,123.92, while the S&P 500 fell 48.77 points to 2,774.39 and the Nasdaq Composite Index tumbled 103.73 points to 8,457.

West Texas Intermediate crude oil futures for May delivery remained in negative territory – trading at minus-$3.12 per barrel; while June futures also dropped by more than 31% to $14 per barrel.

“If we have not recovered from COVID in July so that enough driving has come back and storage is full, then the price of crude oil is going to be zero,” said Rusty Braziel, CEO of RBN Energy.

Bernadette Johnson, Enverus’ vice president of strategic analytics, said the June contract will remain under pressure until demand returns. Meanwhile, oil producers will halt production given lack of storage space.

“What we’re into now is shut-in economics,” she said. “Product demand is off and when product demand is off, you don’t buy crude. If you don’t buy crude, you can’t produce the crude if there’s not a place to store it, and so that’s the problem.”

International Business Machines (IBM) reported a 3.4% drop in first quarter revenue from a year ago.

Late on Monday, U.S. President Donald Trump said he will temporarily suspend immigration to the U.S. due to the coronavirus pandemic.

The governor of Georgia Brian Kemp said he plans to reopen the state’s economy, with many businesses to restart as early as Friday.

There were conflicting reports about the health of North Korean leader Kim Jong Un. U.S. intelligence monitored reports suggesting Kim is in “grave danger” following cardiovascular surgery, but South Korea said he was recovering.

“The uncertainty about who succeeds him in North Korea is the great unknown,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific. “That’s what is making markets nervous.”

“Market volatility remains intense, as subtle changes in the tone of the news drives dramatic shifts in investor sentiment,” said Mark Hackett, Nationwide’s chief of investment research. “Markets rallied sharply last week on hope that the worst of the outbreak is behind us. This optimism is likely to face headwinds, as the reopening of the economy is heading for an intense debate.”

Overnight in Asia, markets sank. China’s Shanghai Composite tumbled 0.9%, Hong Kong’s Hang Seng dropped 2.2% and Japan’s Nikkei-225 fell 1.97%.

Brent crude plunged 23.07% at $19.67. Gold futures dropped 2.16%.

The euro slipped 0.27% at $1.0835 while the pound sterling fell 1.23% at $1.2281.