Stocks cratered Monday as investors grappled with the sinking price of oil and the spread of the coronavirus.
The Dow Jones Industrial Average tanked 1,969 points, or 7.6%, on pace for its worst day since December 2008. The S&P 500 plunged 7.3%. The 30-stock benchmark was down 2,109 points at it session low. 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.
The sharp declines followed a roller-coaster week that saw the S&P 500 swing up or down more than 2.5% for four days straight. While Monday’s drop was significant, it still didn’t crack the 20 worst days for the S&P 500.
Investors continued to seek safer assets amid additional fears that the coronavirus will disrupt global supply chains and tip the economy into a recession. The yield on the benchmark 10-year Treasury note dropped below 0.5% for the first time ever, while the 30-year rate breached 1%. At one point early Monday, the 10-year slid to 0.318%.
Saudi Arabia on Saturday slashed official crude selling prices for April, in a sudden U-turn from previous attempts to support the oil market as the coronavirus hammers global demand. The move came after OPEC talks collapsed Friday, prompting some strategists to see oil prices crater to $20 per barrel this year.
“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.
International benchmark Brent crude futures plummeted 29.07% to $32.11 per barrel after dropping 30% earlier. U.S. West Texas Intermediate crude futures dropped 30.98% to $28.49 per barrel, on track for its worst day since 1991. The Energy Select Sector SPDR Fund (XLE), which tracks the energy sector, tumbled 15%.
Bank stocks were smashed as lower yields put pressure on their margins, while an oil crash could cause energy companies to default on their obligations. JPMorgan, Citigroup and Bank of America all plunged more than 10%.
President Donald Trumpblamed the media and the oil price war for the stock rout on Monday, arguing in a series of tweets that lower gasoline prices are “good for the consumer.”