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Wall Street Shares Decline as Oil Rises to a 3-Year High Above $84

Wall Street shares decline on Monday after rising earlier in the day. Brent crude oil rises 2% to a three-year high above $84.

SageFX - Oct, 12, 21

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Principal Points:

  • Stocks on Wall Street slipped on Monday, erasing early-session gains
  • Brent crude, the global oil benchmark, rose 2% to a session high of $84,57, a 3-year high

What’s Moving in the Markets?

Wall Street stocks slipped across sectors to start another volatile week amid looming uncertainty for the economic outlook. At the same time, surging oil prices have increased fears that higher inflation might not be going away.

The Dow Jones Industrial Average finished a choppy trading session by losing as much as 250 points, or roughly 0.7%. Earlier in the session, the 30-stock blue-chip index was up more than 200 points. Meanwhile, the S&P500 and the Nasdaq Composite tumbled 0.7% each as the buying momentum faded across the board.

While the selloff in stocks increased near the final hours of Monday’s action, oil prices surged to multi-year highs. Brent crude, the global oil benchmark, advanced more than 2% on Monday to reach a three-year high of $84.57 a barrel. In addition, West Texas Intermediate, the US crude benchmark, hit a high of over $82 a barrel, a level last seen in October 2014.

What’s the Big Picture for Traders?

Oil prices have accumulated stratospheric gains since their pandemic lows in March 2020. In more detail, the price of US crude oil is higher by over 1,150% since April last year. Back then, the benchmark oil traded below $7 a barrel.

Brent crude, on the other hand, has added more than 420% to its price for the same period. In April last year, the price of the international oil gauge slipped under $16 a barrel.

Analysts point to fears of a supply shortage as a reason behind the massive surge in energy prices. Moreover, the stronger demand is also a result of investor expectations that next year will see increased oil consumption.

In other parts of the financial markets, the fast-developing cryptocurrency space has been on a tear this month. The price of bitcoin has gained over 30% since Oct. 1 and is currently hovering at a six-month high above $57,000 a coin. Additionally, Ether, the second-largest token, has rallied about 20% for the same period and is changing hands near $3,500 apiece.

What to Watch in the Markets?

As the week unfolds, traders will be watching the opening of the earnings season. On Wednesday, the market will keep an eye on the earnings report from investment banking giant JPMorgan.

Next, on Thursday, a slew of reporting from Wall Street mainstays will reveal their financial results for the third quarter. Among them, Citigroup, Morgan Stanley, Bank of America, and Wells Fargo. And Friday is reserved for the corporate earnings of Goldman Sachs.

Economic Data Coming Up Today (EST times)

A fairly lightweight agenda will narrate today’s scheduled economic events in the markets. At 02:00, the UK will publish its average earnings numbers for August. In addition, the claimant count change for September will also be revealed. At 05:00, Germany will announce its ZEW Economic Sentiment for October.

At 10:00, the US will publish its JOLTs Job Openings for August.