Market Snapshot: Dow set to stumble a second day after historic plunge in oil prices

On Monday, the Dow DJIA, -2.44% fell 547 points, or 2.2%, to 23,700. The S&P 500 index SPX, -1.78% declined 49 points, or 1.7%, to around 2,825. The Nasdaq Composite Index COMP, -1.03% lost 76 points, or 0.9%, to 8,573.

What’s driving the market?

A number of catalysts were in play on Tuesday, as investors continued to monitor lockdown rollback plans in the U.S. amid signs that the COVID-19 pandemic is approaching a peak in some states.

Notably, President Donald Trump via Twitter said he plans to sign an executive order temporarily suspending immigration into the U.S. “In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!” the president tweeted, late Monday.

Trump offered no further details about such an immigration suspension. Due to the pandemic, almost all visa processing by the State Department, including immigrant visas, has been suspended for weeks.

Meanwhile, a vote to provide further funds to small businesses hurt by the coronavirus outbreak after a roughly $ 350 billion package was exhausted last week is likely to take place on Tuesday afternoon after the Senate wasn’t able to strike an agreement on Monday.

Markets appeared to be keeping one eye on North Korea, amid speculation about a possible political upheaval brewing in the isolated nation after unconfirmed reports indicate that Kim Jong Un is fragile after recovering from heart surgery. The reports say Kim hasn’t made a public appearance since April 11.

“So succession risk is causing global equity markets to buckle,” wrote Stephen Innes, global chief market strategist at AxiCorp, in a daily research note on Monday.

Tuesday’s action comes after plunging oil prices overshadowed progress in the fight against the deadly pandemic. West Texas Intermediate crude for May delivery CLK20, +88.01%, which expires at the end of the day’s trade, suffered a spectacular descent, falling $ 55.90 a barrel, or 306%, to settle in negative territory for the first time in history.

Even though the energy sector is relatively small compared against other parts of the market, big declines can undermine risk sentiment and spark worries about defaults in the oil-and-gas sector, adding to the likely recessionary environment created by the pandemic.

In corporate news, International Business Machines Corp. IBM, +0.24% reported after Monday’s close that revenue returned to a decline in the first quarter, amid the spread of COVID-19, even as Red Hat sales boosted its cloud business, and said it was pulling its annual forecast.

The tech giant reported first-quarter net income of $ 1.18 billion, or $ 1.31 a share, compared with $ 1.59 billion, or $ 1.78 a share, in the year-ago period.