Crude oil prices skyrocketed on Thursday, rising more than 34% at the intraday highs. U.S. President Donald Trump stated that he expected Saudi Arabia and Russia to pare back production by millions of barrels of oil per day, causing recent rally.
Furthermore, China plans to start purchasing crude oil for its strategic reserves, according to some reports. That information also boosted the oil’s price. As a result, some stocks rose last week after being in red for some time now. They finished the previous session in better condition than the analysts expected.
The Dow Jones climbed up by 534 points before declining briefly. On the other hand, the S&P 500 and Nasdaq each collapsed on Wednesday, hitting the low record over the last two weeks. Investors’ concern about extended self-isolation orders and lockdown caused the stocks to fall.
The stock markets are still mostly trading in bearish territory. They have been volatile in the previous months as the countries went into lockdown due to the pandemic. The social distancing measures, while a necessary step to prevent the virus, have weighed heavily on the economy.
Automakers Fiat Chrysler and General Motors each reported sharp first-quarter sales declines, as consumers preferred to stay at home. Furthermore, many individual businesses have had to lay off workers. The new U.S. economic data showed that weekly unemployment insurance claims far exceeded expectations, reaching 6.648 million.
According to Chris Rupkey, the chief financial economist for MUFG Banks, Washington and state governments were not prepared for the rapid spread of the coronavirus. He declared that analysts expected massive job losses.
The claims’ record level underscored the negative impact the coronavirus has had on the domestic economy, causing the labor market swift devastation rather than building to a peak as in prior downturns. Some experts think that the stock will decline further in the coming weeks.
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