Wall Street Slips, Oil Prices Plunge After OPEC+ Output Boost/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks slid Monday and oil prices fell to a four-year low after OPEC+ announced it would increase production starting June 1. The S&P 500 dropped 0.7%, while oil dipped below $60 per barrel, rattling energy stocks. Investors are also grappling with tariff uncertainty and the Federal Reserve’s upcoming rate decision.
Wall Street and Oil Prices Slide: Quick Looks
- S&P 500 Down 0.7%: Broad losses hit nearly 75% of listed stocks.
- Oil Drops Below $60: U.S. crude falls 1.5% to $57.42 — a four-year low.
- OPEC+ Expands Output: Group to raise production by 411,000 barrels per day starting June.
- Energy Stocks Slide: ExxonMobil drops 2.4% amid fears of unprofitable oil prices.
- Buffett to Step Down: Berkshire Hathaway tumbles 5.5% as Warren Buffett announces retirement.
- Fed Rate Decision Looms: Central bank expected to keep rates steady despite inflation risks.
- Tariff Turmoil Continues: Trump’s shifting trade policies fuel market uncertainty.
- Nasdaq, Dow Decline: Nasdaq falls 0.8%, Dow slips 164 points in morning trading.
- Treasury Yields Steady: 10-year yield edges up to 4.32%.
- Investor Sentiment Wavers: Market grapples with mixed signals on inflation and trade.
Wall Street Slips, Oil Prices Plunge After OPEC+ Output Boost
Deep Look
Wall Street kicked off the week with losses across all major indexes, and oil prices slumped to their lowest levels in four years after OPEC+ announced plans to ramp up production starting next month. The group of eight oil-producing nations revealed over the weekend that it will increase output by 411,000 barrels per day beginning June 1, pressuring oil markets already on edge amid slowing demand.
U.S. crude dropped 1.5% to $57.42 per barrel, falling below the $60 threshold — a level many analysts cite as a break-even point for many producers. The overnight drop reached as much as 4% before rebounding slightly. The sharp decline sent energy stocks tumbling, with ExxonMobil falling 2.4% in early trading.
The broader S&P 500 slipped 0.7%, while the Dow Jones Industrial Average dropped 164 points (0.4%), and the Nasdaq Composite shed 0.8%. About three-quarters of stocks in the S&P 500 were in the red Monday morning, underscoring the widespread investor unease.
Among the biggest headlines was the 5.5% plunge in Berkshire Hathaway, triggered by news that Warren Buffett will step down as CEO by the end of the year. The 94-year-old investing icon will retain his position as chairman, but the announcement sent shockwaves through the financial world and weighed on investor confidence.
The downturn came despite the S&P 500’s recent momentum — the benchmark index had just completed a nine-session winning streak.
Global markets are also reacting to the latest developments in the ongoing trade tensions, sparked by President Donald Trump’s expansive use of tariffs. While some of the more severe tariffs scheduled for April implementation have been postponed by three months, levies targeting China remain in force. The uncertain policy direction continues to rattle both markets and central bank policymakers.
Despite inflation showing signs of easing, the Federal Reserve is unlikely to lower interest rates when it meets this week. Instead, it is expected to hold its key benchmark rate steady at 4.3% as it awaits further clarity on inflation and the economic fallout from the trade war. The Fed cut rates three times in 2024 but has since adopted a more cautious posture.
Fed Chair Jerome Powell and his team remain concerned that inflation could reignite, particularly in light of rising import costs driven by tariffs. Analysts say that Trump’s on-again, off-again approach to trade has made it difficult for businesses and consumers to plan, leaving economists unsure about the broader economic trajectory.
“Markets hate uncertainty, and this administration’s approach to tariffs creates plenty of it,” said one analyst.
Elon Musk, who now heads the Trump administration’s Department of Government Efficiency, added to the friction last week by criticizing the Federal Reserve’s $2.5 billion renovation project. Musk questioned whether taxpayer money was being wisely spent, sparking further debate about the Fed’s credibility and independence.
Meanwhile, Treasury yields held steady, with the 10-year yield ticking up slightly to 4.32% from 4.31% on Friday, suggesting a wait-and-see approach from bond investors ahead of the Fed’s rate decision.
While last week offered relief for investors buoyed by temporary tariff delays, the combination of oil market volatility, leadership changes, and monetary policy uncertainty has once again darkened the near-term market outlook.
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