Stocks are pointing to another day of big losses as oil prices continued to crash on slumping demand due to the economic fallout stemming from the coronavirus pandemic.
At market open on Tuesday, the Dow Jones Industrial Average plummeted more than 500 points, or 2.3%, while the S&P 500 dropped 57 points, or 2%, and the Nasdaq Composite slid nearly 150 points, or 1.75%.
Investors had their eyes on the price of West Texas Intermediate crude oil — considered the benchmark for U.S. crude prices — which fell below $0 a barrel on Monday for the first time in history, signaling an unprecedented global energy surplus. At the start of the year, oil sold for upwards of $60 a barrel.
As the demand for oil collapses, market watchers are concerned about a lack of storage as the world runs out of places to stockpile the oil. (The industry pumps out about 100 million barrels a day.) The May contract for West Texas Intermediate futures also settled in negative territory yesterday, and June’s contract is trading down 20%.
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The startling oil prices have also raised concerns about the broader economic damage caused by the COVID-19 outbreak: Federal stay-at-home orders have forced the closures of many retail stores, restaurants, sporting venues and more. These shutdowns have inevitably shifted the U.S. economy —decimating the workforce through furloughs, endangering already-struggling businesses and forcing retailers to make adjustments to their omnichannel strategies.
Also driving the market this morning was President Donald Trump’s late Monday tweet, in which the U.S. leader said he would sign an executive order to temporarily halt immigration to protect jobs “in light of the attack from the Invisible Enemy.” (He did not provide specific details.)
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