Wall Street closed lower on Monday, pulled down by energy, tech and discretionary stocks. Investor mood was grim after assessing President Trump’s latest tariff announcements. All three most widely followed indexes closed the session in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.2%, or 98.60 points, to close at 41,218.83. Seventeen components of the 30-stock index ended in negative territory, while 13 ended in positive.
The tech-heavy Nasdaq Composite fell 133.49 points, or 0.7%, to close at 17,844.24.
The S&P 500 fell 36.29 points, or 0.6%, to close at 5,650.38. Nine of the 11 broad sectors of the benchmark index closed in the red. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Materials Select Sector SPDR (XLB) declined 1.8%, 1.1% and 0.7%, respectively, while the Communication Services Select Sector SPDR (XLC) advanced 0.2%.
The fear-gauge CBOE Volatility Index (VIX) increased 4.2% to 23.64. A total of 13.67 billion shares were traded on Monday, lower than the last 20-session average of 18.68 billion. Decliners outnumbered advancers by a 1.88-to-1 ratio on the NYSE.
Investor Mood Grim on Tariffs on Movies Produced Outside the U.S.
On Sunday, President Donald Trump announced a 100% tariff to be imposed on movies produced outside the United States. Trump said that the American movie industry was dying a "very fast death" due to the incentives that other countries were offering to lure filmmakers. The government is looking to authorize agencies, like the Department of Commerce, to immediately begin the process of imposing a 100% tariff on all films produced abroad that are then sent into the United States. He added that he wants movies made in America again.
"This is a concerted effort by other Nations and, therefore, a National Security threat. It is, in addition to everything else, messaging and propaganda," Trump said on his social media page. However, it was not clear whether the tariffs would apply to movies on streaming services as well as those shown in theaters or if they would be calculated based on production costs or box office revenue. The industry awaits further details. Market participants remained concerned about yet another front opening up in the tariff war.
Oil Prices Drop to 4-Year Low
On Monday, the price of oil fell by more than $1/barrel. This follows the OPEC+’s decision to accelerate its output hikes, stoking fears about rising global supply at times of uncertain demand. Brent crude closed at $60.23/barrel, down $1.06, or 1.7%. WTI crude slid $1.16, or 2%, to close at $57.13/barrel. For both benchmarks, this was their lowest close since February 2021.
Consequently, shares of Exxon Mobil Corporation XOM and Chevron Corporation (CVX) lost 2.8% and 2.2%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Per the Institute of Supply Management, the ISM Services Index for April came in at 51.6%. The number for March was unrevised at 50.8.
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Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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