The Dow Jones index advanced by 0.98% but the Nasdaq, with a strong technological coloring, yielded 0.48% while the broader S&P 500 index grabbed 0.25% around 2:10 p.m. GMT.
On Friday, Wall Street had ended a turbulent quarter in the green. The Nasdaq had gained 1.74%, the Dow Jones index 1.26% and the S&P 500 1.44%.
Over the quarter, which in March saw a mini-panic among regional banks and another Fed rate hike, the broader S&P 500 index, the most representative of the market, marked an increase of 6.7%. and the Nasdaq a jump of more than 16%. The Dow Jones is back to where it was at the start of the year.
On Monday, oil prices rose by more than 6.50% following the surprise announcement on Sunday by several major exporting countries of a reduction, from May, in their production.
The decline will exceed one million barrels per day (bpd), the largest reduction since October.
“The jump in oil prices is showering risk appetite” on the markets and “already causing concerns regarding inflation,” said Joe Manimbo of Convera Financial Services.
More expensive oil also complicates the task of the US Federal Reserve (Fed), which has drastically raised interest rates to curb persistent inflation.
The Fed aims to reduce price increases to 2%, but the latest PCE index, the monetary institution’s favorite gauge published on Friday, was still up 5% over one year in February.
The White House did not appreciate the announcement from Saudi Arabia, the United Arab Emirates, Oman, Kuwait, Algeria and Iraq.
“It is not appropriate to reduce production at this time given the uncertainties of the market,” said Monday a spokesman for the National Security Council of the White House. “We will continue to work with all producers (…) to ensure that energy markets support economic growth and that prices remain low for American consumers,” he added.
On the coast, oil stocks took advantage of the situation. The energy sector topped the S&P’s eleven sectors, jumping 5.32% which supported the Dow Jones on the rise.
Oil services groups posted the best performance such as Halliburton or Schlumberger, which rose by more than 8%, as did ConocoPhilips. Exxon Mobil gained more than 5% and Chevron nearly 4% around 1:50 p.m. GMT.
Tesla shares fell 4.42% to 198 dollars despite an increase in the number of its vehicles delivered in the first quarter, progress recorded mainly thanks to price reductions from the electric manufacturer.
In the ring, the professional wrestling line WWC (World Wrestling Entertainment, WWE) took badly (-4.65%) its announced merger with the Ultimate Fighting Championship (UFC).
The entertainment juggernaut Endeavor (-0.38%), owner of the UFC, will hold a majority stake of 51% in the new entity which will be listed on the New York Stock Exchange in the second half. It is valued at over $21 billion.
The first week of the quarter was a shortened week with markets closed on Good Friday, however one important indicator will dictate investor positions.
On Friday, the Labor Department will release official US employment figures for March. Analysts expect a slight reduction in job creation to 239,000, a figure that remains solid while the unemployment rate should remain stable at 3.6%, still close to its all-time low.