Stock-index futures dragged lower while oil gains after historic agreement on output cuts

U.S. stock-index futures quickly give up early gains Sunday evening, as oil prices rose following a historic agreement by major producers to curb production, ending a price war between Saudi Arabia and Russia.

Investors also remain focused on the COVID-19 pandemic, on the lookout for confirmation that the outbreak may be plateauing as they prepare for the kickoff of a brutal first-quarter earnings season.

What are major indexes doing?

Futures on the Dow Jones Industrial Average
YM00,
-1.17%

dropped 290 points, or 1.2%, to 23,326, while S&P 500 futures
ES00,
-1.16%

lost 1.2% and Nasdaq-100 futures
NQ00,
-1.25%

declined 1.2%.

U.S. and European markets were closed Friday for the Good Friday holiday. European markets remain closed Monday for Easter. The S&P 500
SPX,
+1.44%

last week jumped 12.1% for its largest weekly rise since 1974, while the Dow
DJIA,
+1.22%

advanced 12.7% and the Nasdaq Composite
COMP,
+0.77%

rose 10.6%.

Market Extra:16 million people just got laid off but U.S. stocks had their best week in 45 years

What’s driving the market?

“The big banks will kick off earnings season this week, and everyone is bracing for some ugly results,” said Edward Moya, senior market analyst at Oanda, in a note.

“Despite all the uncertainty that persists regarding the coronavirus, optimism is growing that the virus may be peaking in major global hot spots and that the Fed and Capitol Hill have delivered enough stimulus to provide a safety net for corporate America,” he said.

Stock-index futures were not helped much by crude prices, which surged at the opening bell but soon turned south, before jumping again. Earlier Sunday, the Organization of the Petroleum Exporting Countries, Russia and the U.S. completed a deal that would see global output cut by 9.7 million barrels a day beginning in May. West Texas Intermediate crude for May delivery
CLK20,
+2.98%

was last up more than 5%.

The deal ends a month-long price war between Saudi Arabia and Russia that flooded the world with unneeded crude and amplified a meltdown in oil prices. The selloff in crude prices was seen amplifying volatility across global financial markets as investors reeled from the economic impact of the pandemic and the resulting near shutdown of much of the world economy.

But analysts had warned that a lasting lift to crude prices could prove elusive given the scale of the hit to demand that had already left the oil market substantially oversupplied.

The daily death toll from COVID-19 in New York City, the center of the outbreak in the U.S., topped 700 on Sunday for a sixth straight day, but the number of hospitalizations has continued to slow, offering a sign of hope.

See:After worst week of coronavirus deaths, New York starts to see signs of hope

Dr. Anthony Fauci, the top U.S. infectious disease expert, told CNN on Sunday that the economy in parts of the country could be allowed to reopen as early as May.

Markets may face a key test this week as earnings season gets under way. Bears contend that the rebound off the March 23 lows has gone too far, too fast and that a retest of the downside will likely come as companies continue to downgrade or suspend their outlooks.

See: Stock market bulls hope that the S&P 500 will rally further even as corporate earnings crater

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