By Joe Wallace and Joanne Chiu 

U.S. stock futures wobbled and oil dropped sharply Monday as investors grappled with the mounting economic toll after U.S. government officials signaled that measures to contain the coronavirus pandemic may remain in place for an extended time.

Futures tied to the S&P 500 index wavered between gains and losses, suggesting that U.S. shares could be headed for another volatile trading session at the start of the week. U.S. crude-oil futures dropped to their lowest level in over 18 years, weighing on the shares of oil-and-gas producers and pushing European and Asian stocks lower.

The White House on Sunday extended its social-distancing guidelines through the end of April. The move marks a shift in stance for President Trump, who had said that he hoped to ease restrictions in coming days to limit the economic damage. The end of the first quarter, on Tuesday, will also test many businesses' ability to pay bills. Traders meanwhile are bracing for fresh constraints on liquidity in some financial markets as investors take stock of portfolios and banks assess their balance sheets at the end of March.

Markets have entered a new phase in their response to the pandemic, said James McCormick, a strategist at NatWest Markets. After governments and central banks took extraordinary steps to backstop livelihoods and the financial system in March, investors are now attempting to assess the economic impact of the worsening pandemic and the effectiveness with which these stimulus packages are deployed.

"In April, we're settling into understanding a bit more about the growth impact and looking hopefully for some signs of flattening of the infection and mortality curves," Mr. McCormick said.

U.S. crude-oil prices came under renewed pressure as the restrictions on business activity in most economies- -- combined with the threat of elevated production levels from Saudi Arabia and Russia -- raised the prospect of a longer downturn in fuel markets.

West Texas Intermediate, the main U.S. crude gauge, fell 5.3% to $20.35 a barrel. Brent crude, the global oil benchmark, slumped 6.1%, extending its plunge this year to more than 60%.

In another sign of investor caution, the yield on the 10-year U.S. Treasury note, a security that is seen as a haven, fell to 0.634%, according to Tradeweb, from 0.744% Friday.

Investors are awaiting a series of data releases this week that will start to reveal the economic strain exerted by the pandemic and measures to contain the spread of the virus. In the U.S., surveys of purchasing managers are expected to show a steep decline in manufacturing activity, while jobless claims are likely to rise again after last week's record surge.

"There's still a lot of bad news to come on the macro front," said Nicholas Brooks, head of research at International Capital Group, referring both to economic data and the coronavirus death toll. "It's hard to see a sustained rally in markets in this kind of environment."

In Europe, the pan-continental Stoxx Europe 600 index lost 0.8%.

The South African rand fell to a record against the dollar after Moody's Investors Service cut its credit rating to junk. The decision, which will remove South African debt from the FTSE World Government Bond Index, is likely to be followed by further downgrades to credit ratings in emerging markets, analysts said.

In Asia, Japan's Nikkei 225 index, which logged its best week in its history last week, pulled back more than 1.5%. Hong Kong's Hang Seng Index and the Shanghai Composite in mainland China also retreated.

Monetary authorities in the region also took further steps to shore up markets and economies. China's central bank cut an interbank interest rate, while its counterpart in New Zealand said it would start buying corporate bonds to help companies stay afloat. Singapore, which uses foreign-exchange rates rather than borrowing costs as its main policy tool, also eased policy.

One outlier in global markets was Australia, whose benchmark S&P/ASX 200 soared 7% by the close of trading Monday after the government unveiled a A$130 billion ($80.1 billion) wage-subsidy program.

The renewed volatility follows a week in which the Dow Jones Industrial Average logged its biggest advance since 1938.

"We've had the rally, and now we might have a bit more of the reality," said Sean Taylor, chief investment officer for the Asia-Pacific region at asset manager DWS.

The U.S. move to extend social distancing reflects how the focus of the pandemic had shifted from China to the U.S. and Europe, with public-health measures bringing economic activity to a near standstill and reducing global demand, Mr. Taylor said.

Write to Joe Wallace at Joe.Wallace@wsj.com and Joanne Chiu at joanne.chiu@wsj.com

(END) Dow Jones Newswires

March 30, 2020 05:30 ET (09:30 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.