Dow Gains 327 Points as Oil Stocks Rally

The Dow and the S&P 500 ended higher Monday, lifted by energy stocks following surprise cuts to the OPEC+ group's oil output targets, while Tesla tumbled after its electric vehicle deliveries for the first quarter disappointed investors.

Tesla Inc. dropped after disclosing March-quarter deliveries rose just 4% from the previous quarter, even after CEO Elon Musk slashed car prices in January to boost demand.

The S&P 500 energy sector index surged after Saudi Arabia and other OPEC+ oil producers announced unexpected output cuts that could push oil prices toward $100 a barrel. Chevron Corp., Exxon Mobil Corp. and Occidental Petroleum Corp. all rallied strongly.

However, the prospect of higher oil costs added to inflation worries on Wall Street just days after evidence of cooling prices raised expectations that the U.S. Federal Reserve might soon end its aggressive monetary tightening campaign.

"The decision to cut production is a headwind for inflation ... and that's why, on balance we're seeing a generally 'risk off' bias," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

Heavyweight tech-related stocks Microsoft Corp., Amazon.com Inc. and Nvidia Corp. fell, giving back some of their gains in a strong first quarter.

The Dow was lifted in part by a rally in UnitedHealth Group Inc. on better-than-proposed Medicare Advantage rates for 2024.

Investors worried about inflation drew comfort from surveys by the Institute for Supply Management and S&P Global that reflected weakness in manufacturing activity in March.

Interest rate futures imply 56% odds the Fed will raise rates by 25 basis points at its meeting in May, and 44% odds it will keep interest rates unchanged, according to CME Group's Fedwatch tool.

The S&P 500 gained 15.2 points, or 0.37%, to end at 4,124.51 points, while the Nasdaq Composite lost 32.45 points, or 0.27%, to 12,189.45. The Dow Jones Industrial Average rose 327.00 points, or 0.98%, to 33,601.15.

Despite turbulence in the global banking sector, the S&P 500 jumped 7% in the first quarter and the tech-heavy Nasdaq rallied 17%.

First-quarter earnings season is around the corner, with big banks among the first to report in coming weeks and offer details about the sector's overall health after the March collapse of Silicon Valley Bank sparked a fears of a broader industry crisis.