Stocks and Treasury yields dropped Monday, with the S&P 500 down 1.8%, but the market’s most dramatic action was in oil, as the cost to have a barrel of U.S. crude delivered in May plummeted into negative territory.
“I don’t think any of us can really believe what we saw today,” said Dave Ernsberger, global head of pricing and market insight at S&P Global Platts. “This kind of rewrites the economics of oil trading.”
The plunge in oil sent energy stocks in the S&P 500 to a 3.7% loss, the latest in a dismal 2020 that has caused their prices to nearly halve.
Overall the S&P 500 fell 51.40 points to 2,823.16. The Dow Jones Industrial Average lost 592.05 points, or 2.4%, to 23,650.44, and the Nasdaq dropped 89.41, or 1%, to 8,560.73.
The losses ate into some of the big gains indexes have made since late March, driven lately by investors anticipating the potential reopening of businesses as infections level off in hard-hit areas.
“The government can declare whatever they want in terms of encouraging people to get out and do stuff,” said Willie Delwiche, investment strategist at Baird. “Whether or not broad swaths of society do that remains to be seen.”
In a sign of continued caution in the market, Treasury yields remained extremely low. The yield on the 10-year Treasury slipped to 0.62% from 0.65% late Friday. -- AP