In a rare historical event, futures markets were locked limit down in overnight trading on Sunday, as investors panicked over the coronavirus and oil crashed.
On Saturday, Saudi Arabia cut official crude selling prices for April, radically reversing its stance from previous attempts to support the oil market as the coronavirus destroys global demand. The decision for the cut arose after OPEC talks deteriorated on Friday, encouraging confident strategists to predict oil prices tanking to $20 per barrel this year. Unfortunately, they were not far off, as crude hit just over $27 a barrel in overnight trading, and is currently trading near $33.50, down 19%.
“Crude has become a bigger problem for markets than the coronavirus,” Adam Crisafulli, founder of Vital Knowledge, said Sunday. “It will be virtually impossible for the [S&P 500] to sustainably bounce if Brent continues to crater,” he added.
Feeling the pain of crude, investors crushed stocks Monday as they continued to panic over the furious spread of the coronavirus and its global economic implications.
The Dow Jones Industrial Average tanked 1,567 points, a loss of 6.1%, and is on pace for its one day decline since December 2008. Fellow market S&P 500 plunged 5.7%. The massive sell-off triggered a key market circuit breaker minutes after the opening bell. Trading was halted for 15 minutes until reopening at 9:49 a.m. ET. At one point in morning trading, the 30-stock Dow plummeted 2,046 points, and the S&P 500 plunged 7.4%.