The US benchmark indices opened low on Thursday and dipped almost 1%. However, this faded soon after as the Dow Jones Industrial Average Index (DJIA) and the S&P 500 are showing a steady rise.
The first hour of opening of the US stock witnessed a 435 points rise of the Dow Jones, which is a 2.1% increase over its previous close. The S&P 500 index is up by 1.9%. The NASDAQ Composite Index is up by 1.4%
Energy stocks rally in the opening hour of the Wall Street
- Chevron’s shares are up by 8% and are trading at US$74.09.
- Exxon Mobil is up by 10.23% and is trading at US$41.38.
Reasons towards the spectacular rise of the Dow, S&P 500 today
- US President, Donald Trump had an extensive meeting with the Russian President, Vladimir Putin and Saudi Arabia’s crown prince Mohammad Bin Salman regarding the fall in crude oil prices.
- Both Russia and Saudi Arabia seem to have agreed to do a production cut of crude oil by around ten million barrels per day.
- Saudi Arabia has called for an emergency meeting of all OPEC nations.
Traders and investors closely follow the price movement of Crude oil. It directly impacts several industries such as Tyre manufacturing, Rubber, Paint industry, Consumer goods, and the Chemical industry, among various others.
Crude oil prices have seen such a massive fall lately that investors of Crude had to sell-off other assets to cover the losses. Thus, the move to cut oil production is a very prudent one, especially considering the current world scenario.
Coronavirus cases have been increasing worldwide. The number of jobless people in the US has risen to more than six million. The recovery of the US stock market could be short-lived without a strong combat force against the pandemic. For now, the investors might just have breathed a sigh of relief. The US stock markets are closely followed by analysts and investors worldwide. A good day for the US stock markets could have a positive effect on the Asian stock markets as they set to open on Friday morning.
