AP Photo/Ted Shaffrey
- US stocks were mixed Monday, with oil prices in focus.
- Yields rose with oil prices surging after OPEC+ announced production cuts of 1.6 million barrels of oil a day starting in May.
- Tech stocks were lower as yields rose.
Stocks were mixed Monday as trading in the second quarter of 2023 began with oil prices surging after OPEC and its allies unexpectedly said it would start cutting crude production by more than 1 million barrels a day.
The tech-rich Nasdaq Composite lost the most among major indexes as Treasury yields rose on the back of jumping oil prices. Brent oil, the international benchmark, climbed above $84 a barrel for the first time since early March. OPEC+ on Sunday said production cuts of more than 1.6 million barrels a day would begin in May.
“[Tech] stocks have been under pressure on concerns that higher oil prices will push inflation higher and keep the Fed on the warpath to hike rates for longer,” Bespoke Investment Group said in a Monday note.
Shares of oil companies moved higher, with Chevron’s gain aiding the Dow Jones Industrial Average.
Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Monday:
- S&P 500: 4,108.08, down 0.03%
- Dow Jones Industrial Average: 33,378.76, up 0.31% (104.61 points)
- Nasdaq Composite: 12,172.70, down 0.4%
“The primary reason for [OPEC+’s] move was the worry that the financial crisis that began when SVB collapsed would cause a large chain reaction that would significantly slow down the global economy,” Naeem Aslam, chief investment officer at Zaye Capital Markets, wrote in a note.
“Oil countries will continue to beat the drums of more oil supply cutbacks if oil prices fall below $70,” but oil prices are unlikely push pat $100 per barrel until another so-called Black Swan event occurs, he said.
Stock indexes entered the second quarter with first-quarter gains under its belt, led by a 17% surge in the Nasdaq Composite.
Here’s what else is happening today:
- Economist Mohamed El-Erian warns of the “biggest Fed policy mistake in several decades”.
- ChatGPT will not transform the US economy in the next decade, says Nobel laureate Paul Krugman.
- NBA star Giannis Antetokounmpo kept his money in several bank accounts because of the FDIC’s $250,000 limit.
In commodities, bonds, and crypto:
- West Texas Intermediate crude surged 6.6% at $80.67 per barrel. Brent crude, the international benchmark, soared 5% to $84.40.
- Gold edged up 0.4% to $1,995.60 per ounce.
- The 10-year Treasury yield rose five basis points to 4.11%.
- Bitcoin rose 0.6% to $28,252.40.