U.S. stock futures were mostly lower Monday as investors reacted to a surge in oil prices after a surprise production cut was announced by Saudi Arabia and its allies.
-
Dow Jones Industrial Average futures
YM00,
+0.31%
rose 90 points, or 0.3%, to 33550. -
S&P 500 futures
ES00,
-0.12%
dropped 7 points, or 0.2%, to 4131. -
Nasdaq 100 futures
NQ00,
-0.63%
decreased 90 points, or 0.7%, to 13212.
On Friday, the Dow Jones Industrial Average
DJIA,
rose 415 points, or 1.26%, to 33274, the S&P 500
SPX,
increased 58 points, or 1.44%, to 4109, and the Nasdaq Composite
COMP,
gained 208 points, or 1.74%, to 12222.
What’s driving markets
Oil futures
CL.1,
rallied more than 5% and were trading near $80 a barrel after Saudi Arabia, plus its Organization of Petroleum Exporting Countries allies, unexpectedly said they would take more than a million barrels per day off the market starting in May. The Financial Times reported the Saudis were upset the White House said last week that it had no plans to refill the Strategic Petroleum Reserve.
“While higher oil prices normally tend to support stock markets, the news wasn’t welcomed by equity traders here as it revives inflation concerns, which adds uncertainty to an already blurry mid-term context on monetary policy,” said Pierre Veyret, technical analyst at ActivTrades.
The yield on the 2-year Treasury
TMUBMUSD02Y,
climbed 8 basis points to 4.10%.
In Europe, oil majors including BP
BP,
rallied on the news, and bank stocks also were higher as yields rose. A similar mix may help the Dow industrials outperform, with components including Goldman Sachs
GS,
and Chevron
CVX,
There’s also important data to come with the Institute for Supply Management’s manufacturing index due for release at 10 a.m. Eastern.
This post was originally published on Market Watch
