Major US stock indexes finished trading in the red

Major US stock indices fell moderately amid fears that a sharp increase in oil prices after an attack on oil facilities in Saudi Arabia could slow the growth of the global economy.

West Texas Intermediate (WTI) oil futures jumped nearly 13% and are trading at $ 61.80 a barrel. The sharp increase occurred after a series of UAV attacks on oil facilities by the Saudi company Saudi Aramco on Saturday, as a result of which oil production in the country fell by 5.7 million barrels. This represents about 50% of daily oil production in Saudi Arabia and about 5% of world production.

US President Trump wrote on Twitter on Sunday that, to stabilize the oil market, he “authorized the release of oil from the strategic oil reserve, if necessary, in an amount sufficient to keep the markets well-stocked.”

Hussite Yemeni rebels claimed responsibility for the strike on Saudi targets, but US Secretary of State Pompeo said Iran was behind the attack.

Initially, the media reported that Saudi Aramco plans to recover about half of the lost production before the end of Monday. However, Bloomberg reported today that the company is already less optimistic in its estimates.

Higher oil prices are expected to lead to higher fuel prices. This will put additional pressure on the global economy, which has already faced a slowdown in growth in the manufacturing sector. However, the jump in oil prices pushed up the shares of energy companies.

Market participants are also awaiting the Fed’s decision on monetary policy on Wednesday. According to forecasts, the US Central Bank announces a second interest rate cut this year by a quarter basis point. Investors will carefully scrutinize the regulator’s statements for hints as to whether it will continue to soften its monetary policy, which is expected to be crucial in determining the future movement of Wall Street.

Most of the DOW components completed trading in the red (25 of 30). The Walt Disney Company (DIS; -1.79%) turned out to be an outsider. The biggest gainers were Chevron Corp. (CVX; + 2.36%).

Almost all S&P sectors recorded a decline. The largest decline was shown by the services sector (-1.0%). The raw materials sector grew the most (+ 2.2%).

At the time of closing:

Dow 27,076.82  -142.70 -0.52%

S&P 500 2,997.96 -9.43 -0.31%

Nasdaq 100 8,153.54 -23.17 -0.28%