Stock market live updates: Dow falls 500 points, unprecedented oil losses continue

Stocks came under pressure again as an unprecedented rout in oil prices deepened. The West Texas Intermediate contract for May delivery still traded with a negative price, while the June contract, a better indication of where traders believe oil is headed, tumbled below the $20 threshold as demand evaporates. Investors also looked to a wave of corporate earnings to gauge the impact of the coronavirus pandemic. Here’s what’s happening:

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Sen. Chuck Schumer said Tuesday that he believes the Senate will pass an additional relief bill for small businesses later in the day. He said he spoke “well past midnight” with House Speaker Nancy Pelosi, White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin, and that they “came to an agreement on just about every issue.” The government has been under pressure to replenish a fund allocated to small businesses as part of a Paycheck Protection Program program created by the $2.2 trillion relief bill. Those funds, which totaled $349 billion, ran out last week. – Lauren Hirsch

The dollar surged on Monday as investors rushed into safe haven asset amid a plunge in oil prices. The dollar index hit a high of 100.374, its highest level since April 8 when the index hit a high of 100.43. —Fitzgerald, Francolla

The U.S. 10-year Treasury yield hit a low of 0.567% on Tuesday, hitting its lowest level since March 10. Investors piled into bonds amid growing concerns over the global economy while crude and equity futures tumbled. —Imbert

Hayman Capital Management CIO Kyle Bass again warned about exchange traded funds that track oil prices. Bass asked on Twitter if the funds could trade in negative territory if oil futures further along the curve follow the May contract below $0. “If I were a major counterparty after yesterday’s session, I would demand more than 100% collateral,” Bass said. The United States Oil Fund, the largest oil ETF, fell roughly 18% on Tuesday. Bass said Monday on CNBC’s “Closing Bell” that retail investors should stay away from these funds and that he had short positions against some of them. — Pound

After the futures contract for the front month of West Texas International fell below zero on Monday, contracts for June dropped sharply in early trading on Tuesday. The WTI contract for June fell more than 23% to $15.57 per barrel, while internationaly benchmark crude dropped nearly 19% to $20.77 per barrel. The WTI futures contract for May, which fell into negative territory on Monday, was trading at negative $4 per barrel on Tuesday morning. The contract expires later on Tuesday. —Pound

The oil market is facing uncharted territory as the drop-off in demand, caused by the coronavirus pandemic, combined with rapidly filling storage, sent prices plunging into negative territory for the first time in history on Monday. And with only guesswork as to when stay-at-home ordinances might be lifted and when crude demand might pick up, traders warn that oil could continue to trade at extremely depressed levels. “If we have not recovered from COVID in July so that enough driving has come back and storage is full, then the price of crude oil is going to be zero,” RBN Energy’s Rusty Braziel told CNBC. He called Monday’s trading activity “insane,” and said that in his more than 40 years of trading he had “never seen anything like this.” On Monday, West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning people would effectively pay to have the oil taken off their hands. —Stevens

The South Korean won dropped nearly 1% against the U.S. dollar after unconfirmed reports said North Korean leader Kim Jong Un was seriously ill. CNN reported Tuesday, citing unnamed U.S. officials, that Washington was “monitoring intelligence” that Kim is in “grave danger after a surgery.” Daily NK, a South Korean media outlet, said Kim was receiving treatment after undergoing a cardiovascular procedure on April 12. To be sure, Reuters reported, citing two government sources, that Kim was not gravely ill. —Imbert, Huang

Wall Street headed for another lower open on Tuesday as oil’s historic decline showed no signs of ebbing. Dow Jones Industrial Average futures traded more than 400 points lower, or 1.8%. S&P 500 and Nasdaq 100 futures slid 1.4% and 0.8%, respectively. The May WTI contract was deep in negative territory, but more concerning for oil traders was the decline in later-month contracts. The June oil contract traded 18% lower at $16.67 per barrel. The sharp losses in oil raised more concern about the state of the global economy as the coronavirus pandemic ravages the economic outlook. —Imbert

With reporting from Eustance Huang and Jesse Pound.

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