U.S. Stocks May See Further Downside Amid Jump In Oil Prices

Stocks are likely to move to the downside in early trading on Monday, extending the drop seen over the two previous sessions. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 226 points.

Concerns about the impact of the recent surge in oil prices is likely to weigh on Wall Street, with crude for April delivery spiking as high as $130.50 a barrel.

The price of crude oil has given back some ground after reaching its highest level since July 2008 but remains sharply higher.

The continued jump in oil prices comes as Secretary of State Antony Blinken said on NBC’s “Meet the Press” on Sunday that the U.S. and European partners are in “active discussions” about banning the import of Russian oil in response to the country’s invasion of Ukraine.

Higher crude oil prices are already impacting prices at the pump, with AAA saying the national average for a gallon of gas has reached a fourteen-year high of $4.065.

The increase in gas prices is likely to weigh on consumers, who are already grappling with higher prices due to elevated inflation.

After ending Thursday’s session mostly lower, stocks saw further downside during trading on Friday. The major averages all moved to the downside on the day, with the tech-heavy Nasdaq showing a particularly steep drop.

The major averages climbed off their worst levels of the day but still closed firmly in negative territory. The Dow fell 196.86 points or 0.5 percent to 33,614.80, the Nasdaq tumbled 224.50 points or 1.6 percent to 13,313.44 and the S&P 500 slid 34.62 points or 0.8 percent to 4,328.87.

For the week, the Nasdaq plunged by 2.8 percent, while the Dow and the S&P 500 both slumped by 1.3 percent. The Dow closed lower for the fourth straight week.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan’s Nikkei 225 Index plummeted by 2.9 percent, while China’s Shanghai Composite Index tumbled by 2.2 percent.

Meanwhile, European stocks have climbed well off their worst levels but remain mostly lower. While the German DAX Index is down by 1.1 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 0.1 percent.

In commodities trading, crude oil futures are surging $2.18 to $117.86 a barrel after skyrocketing $8.01 to $115.68 a barrel last Friday. Meanwhile, after jumping $30.70 to $1,966.60 an ounce in the previous session, gold futures are rising $9.70 to $1,976.30 an ounce.

On the currency front, the U.S. dollar is trading at 115.28 yen versus the 114.82 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0903 compared to last Friday’s $1.0928.

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