Stock futures opened higher Sunday on Wall Street but quickly gave up early gains, reflecting choppy oil futures markets after major producers reached a deal on production cuts that ended a price war between Russia and Saudi Arabia.
Traders are coming back from a three-day Easter weekend after the S&P 500 reported its fastest weekly increase since 1974 in a step that was partly due to expectations the pandemic is reaching a peak.
The Dow Jones futures fell Sunday night with traders weighing some upbeat developments about coronavirus and a finalized OPEC+ crude oil output agreement.
The OPEC+ production agreement cuts 9.7 million barrels per day from the initial 10 million bpd contract. Mexico's production must be cut by 100,000 bpd.
On Thursday, Mexico's President Andres Manuel Lopez Obrador objected to his country being forced to slash 400,000 barrels per day as part of the initial OPEC+ split. The U.S. will cut a further 300,000 bpd to make up the difference, but that'll mostly be by market forces, not orders by the government.
Global stocks dropped ahead of a week fraught with studies that will include a glimpse at how the coronavirus affected major economies and corporations. Futures climbed 4.5 percent to $32.88 a barrel for Brent, the global benchmark. The new OPEC agreement is intended to help balance the energy market that a price war and coronavirus have rocked.
Wall Street's previous weekly gains came primarily due to an obvious improvement in U.S. coronavirus outlook along with major Federal Reserve stimulus.
Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, said he was cautiously hopeful on Sunday that the outbreak in the U.S. was slowing. He said parts of the country could begin reopening next month, too.
According to Daniel Yergin, vice-president, IHS Markit, US President Donald Trump played a critical part in securing the deal. What couldn't have been imagined is that Trump, who for years has been a major detractor of OPEC, is "the one who put it all together," Yergin said. Trump's actions had to be the "largest and most complicated of all the deals he's made in his life," Yergin said.
In Asian stocks, the Nikkei 225 from Japan and Kospi from South Korea dropped 1.2 percent and 0.8 percent in early trade, respectively. The Shanghai Composite of China lost 0.6 percent. The markets in Hong Kong remain closed for the Easter holiday, and will reopen Tuesday.
