U.S. stocks were mostly lower Monday afternoon, though shares of energy producers enjoyed a lift, as investors reacted to a surge in oil prices after a surprise production cut was announced by Saudi Arabia and its allies.What’s happening
The Dow Jones Industrial Average
rose 240 points, or 0.7%, to 33,514.
The S&P 500
was down about 4 points at 4,106.
The Nasdaq Composite
was down 121 points, or 1%, at 12,101.
Last week, the Dow rose 3.2%, while the S&P 500 advanced 3.5% and the Nasdaq Composite gained 3.4%. The Dow eked out a 0.4% quarterly rise for the first three months of 2023, while the S&P 500 rose 7% for its biggest quarterly gain since the final three months of 2021, and the Nasdaq surged 16.8% for its biggest jump since the second quarter of 2020.
What’s driving markets Oil futures
rallied more than 6% and were trading above $80 a barrel on Monday, a day after Saudi Arabia and its OPEC+ allies unexpectedly said they would take more than a million barrels a day off the market starting in May. OPEC+ is made up of the Organization of the Petroleum Exporting Countries and its allies, including Russia. The Financial Times reported the Saudis were upset after the White House said that it had no plans to refill the U.S. Strategic Petroleum Reserve.Read: Trigger for Saudi oil production move was comment that U.S. would not refill SPR this year, report saysThe OPEC+ announcement “is giving the market a lot of anxiety because it’s another wrench in the works,” said Derek Tang, an economist at Monetary Policy Analytics in Washington. “After the recent bank turmoil, people were thinking that the Fed might be done with hiking rates and might start cutting soon. But if inflation is higher, its harder for them to stop hiking and start easing.”That’s making “the picture muddier and weighing on people’s willingness to take on more risk,” Tang said via phone. The yield on the 1-month T-bill rate jumped 18 basis points to 4.67% as traders factored in a more than 50% likelihood of another quarter-point rate hike by the Federal Reserve in May. Meanwhile, the yield on the policy-sensitive 2-year Treasury note
fell 5 basis points to 4.02% as traders also weighed the economic outlook. Yields and debt prices move opposite each other. The jump in oil prices might make the Federal Reserve’s inflation-fighting job “a little more difficult,” but it is too soon to know for sure, St. Louis Fed President James Bullard said in a Bloomberg Television interview. The surge in crude prices was a boon for shares of energy producers. The Energy Select Sector SPDR ETF
jumped 4.3% and Marathon Oil Corp.
rose 9. …