New York, N.Y. (PPD) — Dow Jones Industrial Average (^DJI) futures are up roughly 1,000 points ahead of the opening bell on Tuesday after the index fell 2,000 points on Monday.
The major market indexes were not so much reacting to growing coronavirus fears, but more predominantly to the “mother of all price wars” between Saudi Arabia and Russia.
The Dow essentially opened down −1,884.88, or 7.29% to 23,979.90 on Monday, triggering market-wide circuit breakers that halted trading for 15 minutes. But the circuit breakers did their job, found a buying market and stopped the bleeding.
Oil prices plunged to their lowest levels in nearly four years after steep wholesale price cuts announced by Saudi Aramco, the state owned oil company. It was a direct response to Russia backing away from an agreement on managed production cuts among members of OPEC (Organization of the Petroleum Exporting Countries).
Although not an OPEC member, Russia is a large producer and exporter of crude and has frequently attended OPEC meetings as a non-member, particularly when coordination is sought on production schedules.