Stock Market Rout Spreads to Commodities Markets

Copper futures tumbled on Monday, following the decline in global equity markets as investors trimmed positions ahead of the U.S. Federal Reserve’s two-day meeting starting on Tuesday. The Fed is widely expected to raise rates 25-basis points on Wednesday, but the market moving event will be the Fed’s economic projections that should indicate to investors whether the Fed will raise rates as many as four times or maintain its current policy of gradual increases.

May Comex High Grade Copper settled at $3.0820, down $0.0255 or -0.82%.

Losses were likely limited by U.S. Dollar weakness. The dollar gave back early gains after a rebound in the Euro. The single-currency was driven higher by reports the European Central Bank is considering raising rates sooner than previously expected.

Gold

Gold prices turned higher on Monday after trading lower early in the session. The market turned positive on flight-to-safety buying tied to weakness in U.S. equity markets. Gold was also supported by weakness in the U.S. Dollar, tied to a strong close in the Euro.

April Comex Gold futures settled at $1317.80, up $5.50 or +0.42%.

Crude Oil

A sell-off in U.S. equity markets drove U.S. West Texas Intermediate crude oil and international-benchmark Brent crude oil lower on Monday. Concerns over the growing crude supply also weighed on prices after a report from Baker Hughes last Friday showed U.S. drillers added four oil rigs in the week to March 16. Losses may have been limited because of growing tensions between Saudi Arabia and Iran.

May WTI crude oil settled at $62.13, down $0.28 or -0.45% and June Brent crude oil finished at $65.82, down $0.39 or -0.59%.

U.S. Equity Markets

The major U.S. equity indexes plunged on Monday with the tech-based NASDAQ Composite posting the biggest loss. The rout was led by a steep decline in shares of Facebook, which dropped 6.8 percent. Traders were also on edge because of a so-called “Twitter Meltdown” by President Donald Trump over the week-end.

In the cash market, the benchmark S&P 500 Index settled at 2712.92, down 39.09 or -1.42%. The blue chip Dow Jones Industrial Average finished the session at 24610.91, down 335.60 or -1.35% and the technology-driven NASDAQ Composite ended the session at 7348.26, down 133.73 or -1.79%.

According to CNBC, Facebook fell after reports said political analytics firm Cambridge Analytica was able to collect data on 50 million people’s profiles without their consent. This raised issues about systemic problems at Facebook.

Additionally, the CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, broke above 20 for the first time since March 7.