Stocks fell sharply on Monday afternoon as Wall Street just had its worst week since the winter. The price of oil hit a seven-year high as OPEC and allied oil producers stuck to a plan to cautiously increase production even as global demand for crude oil increases.
The S&P 500 fell 1.4% at 12:03 a.m. Eastern time. The Dow Jones Industrial Average lost 363 points, or 1.1%, to 33,962.
Losses in tech stocks pushed the Nasdaq down 2.3%. Apple fell 2.5% and Microsoft 2.4%. The big communications companies have also slipped. Facebook fell 4.7%.
US crude oil prices rose 2.6% and topped $ 77 a barrel for the first time since 2014. OPEC and allied oil-producing countries on Monday decided to maintain their cautious approach to restore oil production. reduced oil during the pandemic, agreeing to add 400,000 barrels per day in November.
Natural gas prices jumped 5.7%. Energy companies have increased along with energy prices. Devon Energy rose 3.9%.
The 10-year Treasury yield fell from 1.47% on Friday to 1.48%. The return was 1.31% on September 20 and the recent surge contributed to the weakness in tech stocks. A rapid rise in interest rates has made it necessary to reassess whether stocks have become too expensive, especially the already expensive tech companies.
Investors are increasingly worried about inflation as oil prices rise and companies continue to face supply issues that drive up their costs and force them to raise prices. Wall Street is also worried about the Federal Reserve’s timing to reduce its bond purchases and its possible decision to raise its benchmark interest rate.
âYou really have a lot of reasons for the Band to be trading defensively right now,â said Julian Emanuel, chief equities and derivatives strategist at BTIG. âIf you’re not going to see the bond market pick up and yields go down, then you’re likely to see more volatility in stocks,â he said.
Investors are also bracing for the latest round of corporate earnings, which will rise over the coming weeks. They are also closely monitoring economic data for more signals on the pace of the recovery as businesses and consumers continue to grapple with the impact of COVID-19 and the highly contagious delta variant.
Wall Street will get more information on the health of the economy this week. On Tuesday, the Institute for Supply Management will release its service sector index for September. The service sector is the largest part of the economy and its health is a key factor for growth.
The Ministry of Labor will release its employment report for September on Friday. The job market is struggling to fully recover from the damage caused by COVID-19 over a year ago.
Tesla rose 1.5% after the electric vehicle maker reported surprisingly good third quarter deliveries.
In Asia, the Hong Kong benchmark fell more than 2% after shares in struggling real estate developer China Evergrande were suspended. Stocks in most European markets edged up.