NEW YORK: The S&P 500 and the Nasdaq fell on Monday as rising oil prices rekindled concerns that the US Federal Reserve will stick to its rate-hike campaign for longer to temper inflation, while a slump in Tesla shares also pressured the benchmark index.
Tesla Inc shed 6.1% on growing worries about the electric-vehicle maker’s profit margins after aggressive price cuts led to only a modest increase in quarterly deliveries.
This, coupled with a near 1% fall in major technology stocks and other growth shares such as Amazon.com Inc and Microsoft Corp pushed information technology and consumer discretionary stocks to the bottom of the S&P 500 sector indexes.
Saudi Arabia and other OPEC+ oil producers announced further output cuts of around 1.16 million barrels per day, adding to worries about an increase in price pressures, just days after evidence of cooling inflation raised hopes that the Fed could soon end its aggressive monetary tightening.
A 3.9% gain in energy major Chevron Corp on the jump in oil prices and a 3.6% rise in UnitedHealth Group Inc on better-than-proposed Medicare Advantage rates for 2024, helped stem losses on the S&P 500 and assisted the price-weighted Dow Jones in outshining its peers.
The share value of a stock on Dow is proportional to its influence on the index as opposed to the market capitalization-weighted S&P 500.
Shares of other energy firms such as Exxon Mobil Corp and Occidental Petroleum Corp were also up 5.6% and 4.2%, respectively. The energy sector climbed 4.4% and was headed towards its steepest one-day gain in nearly a year.
At 11:30 a.m. ET, the Dow Jones Industrial Average was up 180.90 points, or 0.54%, at 33,455.05, the S&P 500 was down 4.57 points, or 0.11%, at 4,104.74, and the Nasdaq Composite was down 111.35 points, or 0.91%, at 12,110.55.
US stocks have weathered turbulence in the global banking sector to notch gains in the first quarter, with the S&P 500 jumping 7%, while the tech-heavy Nasdaq recorded its strongest first-quarter jump of 17% since mid-2020.
The S&P index recorded 15 new 52-week highs and no new low, while the Nasdaq recorded 59 new highs and 73 new lows.