Drop in oil price and concerns over the global economy weighed on the Dow Jones industrial average on Monday, after the 30-stock index set a new high on Friday.
Oil prices fell on Monday, adding to last week’s losses, as increasing Covid cases raised fears of a demand slowdown. West Texas Intermediate oil futures fell more than 4% at one point, reaching a low of $65.15, the lowest level since May. During afternoon trading, the contract regained some of its losses, eventually settling 2.64 percent down at $66.48 per barrel. After touching a low of $67.60, international benchmark Brent crude closed at $69.04 per barrel, down 2.35 percent.
With oil falling, energy equities fell 1.3%, according to the Energy Select Sector SPDRETF. Exxon Mobil and Chevron both saw their stock prices drop by 1.2 percent and 1.7 %, respectively. Diamondback Energy has lost 3.5% of its value.
Quick market analysis
The Nasdaq gained 0.16%, while the S&P 500 fell 1%. The Dow Jones industrials lost 0.3%, while the Russell 2000 index of small-cap stocks fell 0.6 percent. On both the Nasdaq and the NYSE, early statistics showed lesser activity than on Friday.
Chevron (CVX) and UnitedHealth (UNH), both of which dropped approximately 1% on Monday, were among the Dow Jones underperformers. Amgen (AMGN) and IBM (IBM) both lost about 1% of their value. Apple (AAPL) lost less than 0.1%, while Microsoft (MSFT) moved down 0.4%.
Meanwhile, in the United States of America, the 10-year Treasury note yield was 1.32% on Monday, up from Friday. Last week, yields increased for four days in a row.
After the Dow Jones Industrial Average and S&P 500 dropped from record highs in normal trade on fears about a rise of Covid-19 cases, U.S. stock futures were barely changed on Monday night.
Futures on the Dow Jones Industrial Average gained 0.04 %. S&P 500 futures ticked up 0.01% and Nasdaq 100 futures slid 0.03%.
Since oil prices tumbled 4%, it prompted a sell-off in energy companies as investors worried that a wave of Covid cases may lead to a demand slowdown.