At closing, the Dow Jones fell by 328.60 points, as the S&P 500 slid 28.19 points into red territory. The day’s trading saw the Dow experience triple-digit losses as the stock value of construction machinery and equipment company Caterpillar declined by more than 8%. Similarly, the S&P 500 was driven to negative results by both the financial and real estate sectors.
The Nasdaq Composite, meanwhile, gained 38.85 points after undergoing varying losses earlier in the volatile session.
Monday’s figures come after the New York Stock Exchange saw one of its biggest weekly gains ever the week prior, with the Dow rallying 12.7% and the S&P 500 spiking 12.1%. However, it’s worth noting that both indices are down 16.9% and 13.7%, respectively, from record highs posted in February.
Looming Quarterly Reports Spark Concerns
Although concerns regarding the COVID-19 pandemic and its effect on the US economy have already driven stocks drastically down in recent weeks, some financial analysts are beginning to feel a renewed sense of uneasiness as major US banks are due to release their quarterly earnings report.
“We think markets are probably not prepared for the weakness in the data and, probably, the duration of the weakness in the data,” Sameer Samana, senior global market strategist for the Wells Fargo Investment Institute, told the Wall Street Journal.
This week, investors will be receiving earnings reports from various companies, including major banks JPMorgan Chase, the Goldman Sachs Group and Bank of America. The reports will cover the first three months of 2020, when the COVID-19 virus first began spreading outside of China.
Historic OPEC+ Deal Sees Oil Prices Rise
Monday’s losses also come just one day after news broke that a deal had been finalized between the OPEC+ member countries and Russia, Saudi Arabia and the US. The weekend deal saw West Texas Intermediate crude trade on Monday at $23.18 per barrel, whereas Brent crude traded at $32.18.
Although the newly agreed upon measures will have a significant impact for the remainder of the year and allow prices to improve, it’s unlikely that the deal will help to completely do away with short-term bumps, Ed Morse, the head of commodities at CitiGroup, wrote in a Sunday note viewed by CNBC.
“Unprecedented measures for unprecedented times,” Morse wrote. “It’s simply too late to prevent a super-large inventory build of over one billion barrels between mid-March and late May and to stop prices from falling into single digits.”
The new, revised deal, which came about after Mexico pulled the plug last Thursday on an agreement for oil production cuts of 10 million barrels per day (bpd), now calls for cuts of 9.7 million barrels per day to begin on May 1.
The cuts are expected to extend through the end of June before being tapered to 7.7 million bpd from July to the end of 2020, when they will then be reduced to 5.8 million bpd from January 2021 through April 2022. The group is expected to meet once again on June 10 to determine whether additional measures need to be taken.