Investing.com — U.S. stock markets opened mostly lower on Monday as crude oil prices hit a seven-year high, reinforcing fears that higher energy prices might choke off the recovery and drive inflation higher.
The Organization of Petroleum Exporting Countries and its key allies indicated they won’t release any more crude to the global market than the 400,000 barrel-a-day increment already planned, disappointing many – including the White House – who had hoped that the bloc would act to keep a lid on prices as global demand recovers more quickly than expected.
However, the opening statement of the so-called OPEC+ group’s decision-making body was more cautious about the outlook for demand in 2022. News agencies reported unnamed sources close to the bloc as saying there would be no change to its output timetable.
By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was barely holding above the gain line, while the S&P 500 was down 0.4% and the Nasdaq Composite was down 1.2%. The Nasdaq typically underperforms when higher commodity prices bolster arguments for higher inflation and tighter monetary policy.
Exxon Mobil (NYSE:XOM) stock rose 1.6% while ConocoPhillips (NYSE:COP) stock rose 2.5% and Occidental Petroleum (NYSE:OXY) stock – of all U.S. majors the one most levered to the price of crude – rose 3.0%.
The gains were funded partly by the release of money from tech stock holdings, as investors rotated back into cyclical names at the expense of growth stocks. Amazon (NASDAQ:AMZN) stock and Microsoft (NASDAQ:MSFT) stock both fell 1.8% while Apple (NASDAQ:AAPL) stock fell 1.6%. The most notable loser among the megacaps was again Facebook (NASDAQ:FB) stock, which fell 3.5% after a weekend of fresh publicity for the governance allegations against it by whistleblower Frances Haugen. The allegations, which Haugen will repeat in Congress this week – were the basis of a series of damaging revelations by The Wall Street Journal over the last two weeks.
The exception to general tech stock underperformance was Tesla (NASDAQ:TSLA) stock, which rose 2.9% to test the $800 level after a surprisingly strong quarter, in which deliveries rose by over 70% from a year earlier despite the global chip shortage that has hamstrung rivals over the summer.