It was a mixed start to the new week, month and quarter for stocks.
But while the major indexes took different directions Monday, oil prices and energy stocks made decidedly strong moves higher. This came after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) over the weekend announced a surprise production cut.
On Sunday, members of the oil cartel, which includes Saudi Arabia, said they will reduce oil production by more than 1 million barrels per day beginning in May. This adds to the 2 million barrels per-day output cut the group agreed to in late 2022. The headlines sent U.S. crude futures spiking 6.0% to $80.24 per barrel – their highest settlement since early March. Energy shares also rose on the news, with blue chip stocks Chevron (CVX, +4.2%) and Exxon Mobil (XOM, +5.9%) among the day's biggest gainers.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"While the announcement may be good news to U.S. energy companies and their shareholders, it is creating another challenge for central banks that are seeking to stymie price increases without sparking recessions," says José Torres, senior economist at Interactive Brokers.
Indeed, the Institute for Supply Management said early Monday that its purchasing managers index (PMI), which measures manufacturing activity in the U.S., fell to 46.3% in March from February's 47.7% reading. This was the lowest level since May 2020 and the fifth straight month the index has been below 50, which signals contraction.
"The oil price shock and the ISM data collectively reflect powerful forces supporting higher inflation amidst deteriorating economic growth," Torres adds.
In single-stock news, Tesla (TSLA) fell 6.1% after the electric car maker said it delivered 422,875 vehicles in the first quarter – up roughly 36% year-over-year but still below the 432,000 deliveries that analysts were expecting, according to FactSet.
CFRA Research analyst Garrett Nelson categorized the delivery figures as a "mild disappointment." However, "with the Austin and Berlin plants continuing to ramp up, first deliveries of the Cybertruck expected in the coming months, a forthcoming factory in Mexico, and a low-priced coupe that we believe will be introduced in 2024," Nelson told clients "the Tesla story has a lot going for it and we reiterate our Strong Buy recommendation."
As for the major indexes, the Dow Jones Industrial Average closed up 1.0% at 33,601 and the S&P 500 added 0.4% to 4,124. The Nasdaq Composite, however, slipped 0.3% to 12,189.
As a reminder, it's a short week for investors, with the stock market closed for Good Friday.
April is a good month to buy stocks
Bullish investors have at least one thing on their side right now: seasonality. "April happens to be one of the best months for the S&P 500," says Michael Reinking, senior market strategist for the New York Stock Exchange, adding that this is especially true in pre-election years. "Since 1970, the average pre-election return for the month is up ~3.2% (median 3.6%), closing higher in 10 of 11 instances," Reinking says.
Investors looking to ride the hot hand of the market during a historically strong month should seek out the best tech stocks or the best communication services stocks, as these have been the top two sectors so far this year. Meanwhile, some of the best value stocks can currently be found in the energy and financial sectors. And regardless of what history says about the direction the market may or may not take in the near term, investors should always focus on quality when seeking out the best stocks to buy right now.
-
The Surprising Truth About Loneliness and LongevityWe've all heard about the epidemic of loneliness that can shorten lives and make retirement miserable. But there's more to the story.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?The Dollar Index Is Sliding. Is Your Portfolio Prepared? The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have TodayBerkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
-
If You'd Put $1,000 Into Procter & Gamble Stock 20 Years Ago, Here's What You'd Have TodayProcter & Gamble stock is a dependable dividend grower, but a disappointing long-term holding.
-
Stock Market Today: Trump's Copper Comments Cause a StirMarkets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
-
Stock Market Today: Trump Reextends His Tariff DeadlineWhen it comes to this president, his trade war, the economy, financial markets and uncertainty, "known unknowns" are better than "unknown unknowns."
-
Stock Market Today: President Trump Reboots the Tariff TradeA broad consensus that markets hate uncertainty more than anything else is being tested on an almost daily basis in 2025.
-
Stock Market Today: Another Quarter, More Mixed Price Action"Up and to the right" remains the general trend despite persistent uncertainty around critical policy issues.
-
The Riskiest S&P 500 Stocks Right NowBuyer beware: These are five of the riskiest stocks in the S&P 500 at the moment, based on one measure of volatility.
-
Stock Market Today: Stocks Chop as Chipmakers DeclineSeveral semiconductor stocks fell Friday on reports that the White House may consider revising license waivers for global chipmakers.
