Dow drops 800 points, oil drops as Delta variant sends bond investors
U.S. stocks, oil prices and government bond yields fell on Monday over concerns that the spread of the Delta coronavirus variant could dampen the global economy.
The Dow Jones Industrial Average fell 802 points, or 2.3%, starting the week with big losses after the index ended a three-week winning streak on Friday. The S&P 500 fell 1.9%, while the tech-rich Nasdaq Composite fell 1.7%.
A sign that investors were taking refuge in the safety of government bonds and other safe-haven assets, the yield on 10-year Treasuries fell to 1.19% from 1.30% on Friday. Yields, which fall when bond prices rise, have not been this low since February.
Oil prices fell after the Organization of the Petroleum Exporting Countries and a Russian-led group of big producers agreed to increase production. Futures on Brent crude, the international benchmark, fell 4.5% to $ 70.30 a barrel, their lowest level since June.
The movements recalled the trade patterns that prevailed at the start of the pandemic. Investors sold stocks of companies directly affected by the restrictions on movement and activity, while buying government bonds and stocks that may benefit from the work-from-home phenomenon.