U.S. stocks plummet by 5% after crude loss fans market fears

U.S. stock futures declined sharply by 5% to its daily limit after a record-breaking, single-day drop in Crude Oil WTI Futures in thirty years fanned market fears of a credit crunch worldwide.

Saudi Arabia’s move to increase oil production to above 10 million barrels per day and decrease its selling price came after Russia hesitated on an OPEC-backed decision to slash prices in order to stabilize its value hit by the virus.

Oil prices fell 20% which led to panic global sell-off in stock markets as the worries of loss in oil assets piled onto an already rising fear of a U.S. recession and a freeze in credit.

The decline in S&P 500 futures fell to its 5% down limit, amplified by worries that a global economic impact from the coronavirus could steer the U.S. into a recession. However, according to chief market strategist at Ameriprise Financial David Joy, the sell-off in stocks could indicate confidence that markets would stabilize eventually and resume its upward trend.

Investor concerns riled after Italy, the country hardest hit by the virus in Europe, essentially locked down much of its wealthy north, including the financial capital Milan.