Dow Drops by Nearly 600 Points as the Week Starts with Massive Oil Price Crash to Below Zero

UTC by Christopher Hamman · 3 min read
Dow Drops by Nearly 600 Points as the Week Starts with Massive Oil Price Crash to Below Zero
Photo: Depositphotos

The Dow Jones lost nearly 600 points at the start of the week. This comes as U.S. lawmakers are set to determine further stimulus measures for the economy. President Trump has also recently announced a temporary suspension in immigration.

The Dow has taken a fall alongside other markets. This comes after two weeks of recovery and new hope that the worst was over for the financial markets. The situation with the Dow Jones is not teh only one to speak about as oil prices have also dropped.

Dow Fell Alongside Oil Prices

The margins this time have been huge and even strange. West Texas Intermediate (WTI) Crude fell to -$37.63. This is happening as most of the WTI contracts are due today.

The markets didn’t fare well either. The Dow Jones fell 2.44 % to 23,650.44 points. The S&P 500 also followed suit by falling to 2,823.16 (1.8%). The Nasdaq Composite also had its share of negative movement to 8, 560.73 (1%).

Bluechip stock prices also fell across the board. Chevron Corporation (NYSE: CVX) and ExxonMobil Corporation (NYSE: XOM) fell by more than 4% each. Boeing Co (BYSE: BA) fell by about 6%.

The drop in oil prices through dramatic isn’t the finale of the markets. We are looking at a situation where there is no demand for Crude in virtually all sectors.

Airlines, for example, are still flying their routes, but are flying empty due to movement restrictions and no passengers. So the flights are strictly the smallest requirements. Such required flights are to maintain their routes as per government regulations. There is virtually zero demand for downstream products as a result of the global movement restrictions.

This comes as the COVID-19 pandemic has left quite a bit of destruction in its trail. The global economy is tanking, and the numbers of the unemployed are rising.

The oil industry is going to see further negative numbers down the board as the COVID-19 situation seems to be worsening in the West. Already, WTI’s June and July contracts are down by 15.6% and 6.9% respectively.

Things to Go Worse

The figures may get even worse. Sources say that the United States has temporarily suspended immigration. It remains unclear on the duration of the suspension. The travel oil, real estate, and other sectors will be the worst hit from this move.

Until a vaccine, an effective treatment regimen or cure is found, the situation is bound to remain topsy-turvy. This comes as the markets will continue their movement into malaise for the time being.

On the political side, the U.S. lawmakers are rushing behind the scenes to put together another round of stimulus to jumpstart an already weakened economy.

The U.S. Senate is expected to vote as early as today. The markets have been waiting on the details.

Analysts expect the markets to recover just as sharply as they have fallen. This time though, the markets may also fall with a rise in new deaths and infections.

For now, hope seems to set in as the state of New York is experiencing a decline in these numbers. All we can all do now is wait for a new set of numbers to give a direction of where the new epicenter will be.

Commodities & Futures, Indices, Market News, News, Stocks
Related Articles