US stocks, oil, treasuries fall as delta variant dampens economic recovery

U.S. stocks, oil prices, and treasuries all fell on Monday as fear increased over the spread of the Delta coronavirus strain which would jeopardize the broader economic recovery.

In midday trading, the Dow Jones Industrial Average fell 898 points, or 2.59 % at 2:00 PM ET, putting the index on course for its biggest one-day decline since October.

The S&P 500 lost 1.7 %, while the Nasdaq Composite sank 1.1 %. Monday's losses came after U.S. stock indexes fell last week, ending a three-week gaining streak.

The banking sub-index fell 3%, mirroring the drop in the benchmark 10-year Treasury yield which was lowest since February.

Oil prices plummeted as the Organization of Petroleum Exporting Countries and a group of major producers led by Russia agreed to increase output. Brent crude futures, the worldwide benchmark, fell 5.7 % to $69.36 a barrel, the lowest level in more than six weeks.

The movements resembled the trade patterns that occurred in the early days of the pandemic. Investors sold shares in firms immediately harmed by mobility and business restrictions, while purchasing government bonds and stocks that stood to profit from renewed restrictions, WSJ reported.

Shares of travel-related firms dropped again on Monday soon after they began to rise after suffering significant losses during pandemic-related lockdowns last year. The S&P 500 Airlines subindex fell 4.27 %.

American Airlines Group, United Airlines, Royal Caribbean Cruises, Norwegian Cruise Line, and Carnival corp all lost between 4.5% and 5.7%.

On Monday, stocks that surged included supermarket chain Kroger, which jumped 3.6%, and online-crafts marketplace Etsy, which rose 2.9 %.

New infections increased in areas of Asia and UK, while COVID-19 cases in the United States increased by 70% last week, fuelled by the Delta variant due to which investors have reduced their forecasts for economic growth in the next months as a result.  

Shares of Alibaba Group Holding fell 3.25%, Baidu declined 3.79%, and Didi Global, a ride-hailing service, fell 6.43% on increased worries of anti-monopoly action against big internet businesses.

Zoom Video Communications Inc fell 2.85 % after the provider of teleconferencing services announced a $14.7 billion agreement to acquire cloud-based contact center operator

The S&P 500's 11 sectors were all in the red on Monday. The worst-performing industries were energy and finance. Marathon Oil, an energy company, fell 5.5 %.

Meanwhile, inflation surged to a 13-year high in June. Some data shows that price rises have begun to undermine consumers' confidence in their capacity to continue spending.

Picture Credits: Livemint