Crude prices shoot higher, Wall Street sank into the red on Monday, after weekend drone attacks knocked out much of Saudi Arabia’s oil production.
The lower open threatened to break an eight-day winning streak for the benchmark Dow Jones Industrial Average, with the major US stock indices just below fresh record highs.
Markets were also digesting a batch of poor economic data out of China and awaiting Wednesday’s Federal Reserve announcement on monetary policy.
Ten minutes into the day’s trading, the Dow and broader S&P 500 were both down 0.4 percent at 27,112.32 and 2,996.52 respectively.
The tech-heavy Nasdaq was 0.5 percent lower at 8,139.64.
While the spike in oil prices — WTI benchmark crude was up a towering $5.32 at $60.17 per barrel — sent oil stocks higher, investors may fear more expensive oil could further slow an already waning global economy.
Oil supermajors Exxon Mobil and Chevron were up 2.6 percent and 2.7 percent respectively.
Fresh economic data on Monday showed activity in China slowed last month across the board, with the pace of industrial production, retail sales and investment in fixed assets all lower.
In the United States, automaker General Motors was down 2.9 percent after unionized autoworkers began a nationwide strike over disagreements on wages, health care benefits and job security.
The Federal Reserve is widely expected to announced an interest rate cut on Wednesday, the second of the year, as the American economy slows with the rest of the world and President Donald Trump’s trade conflicts drag on.