Investing.com — The Dow Jones closed lower Monday, led by a decline in energy stocks due to falling oil prices and weaker manufacturing data that pointed to a slowdown in the economy.
At 4:00 PM ET (20:00 GMT), the 30 stock fell 115 points or 0.5%, although it closed well above session lows as dip buyers emerged late in the session. The benchmark rose 0.2%, while the tech-heavy index rose 0.6%.
Energy stocks start June on the back foot
Energy stocks fell more than 2% to put pressure on the broader market following a prolonged slump in the oil sector after OPEC and its allies, or OPEC+, agreed to extend current production cuts until 2025, although they said they were too would face the gradual phasing out of some voluntary cuts after the third quarter.
The move to relax some of the production cuts fueled fears of a supply glut at a time when many are questioning the strength of crude oil demand.
The phase-out “represents a stronger indication that extreme levels of market support from OPEC+ (mainly Saudi Arabia) will not last forever,” Macquarie said in a note, warning that it “appears problematic for 2025.”
Halliburton Company (NYSE:), Diamondback Energy Inc (NASDAQ:). Baker Hughes Co (NASDAQ:) was among the biggest decliners
Paramount reportedly agrees to merger with Skydance, Marinemax peaks over takeover report
Paramount Global Class B (NASDAQ:) rose more than 7% after the media company agreed to Skydance’s merger terms, CNBC’s David Faber reported Monday.
Skydance has sweetened its bid for Paramount to $8 billion, down from $5 billion previously, but the deal still requires the support of National Amusements’ owner, which owns a 77% stake in Paramount.
MarineMax Inc (NYSE:) also rose sharply on merger news after Bloomberg reported that the company is in sales talks with OneWater Marine on a deal worth $40 per share.
Chips in focus as AMD and Nvidia unveil new AI chips
Advanced Micro Devices Inc (NASDAQ:) fell more than 2% even as the chipmaker unveiled new artificial intelligence chips, while rival NVIDIA Corporation (NASDAQ:) rose more than 4% after unveiling its next-generation superchips to succeed are current Blackwell chips.
Production activity is declining; monitored non-farm payrolls
Ahead of a busy week in the top data economic calendar, manufacturing activity fell more than expected in May as high interest rates continued to weigh on investment and expansion plans.
“The environment for capex investment remains very challenging as long as interest rates remain high,” Jefferies said in a note.
The focus week will be on the upcoming May data, due later this week, which is expected to provide more clues to the labor market – another key consideration for the Fed as it cuts interest rates.
The central bank is and is widely tipped to keep interest rates stable.
(Scott Kanowsky and Ambar Warrick contributed to this report.)
