U.S. stocks tumbled on Monday amid concerns that protests in China might hobble global growth, while investors awaited a deluge of critical economic data, and commentary from Federal Reserve Chairman Jerome Powell, due out later in the week.
How are stocks trading
- The Dow Jones Industrial Average
was down 256 points, or 0.8%, at 34,090.
- The S&P 500
retreated 36 points, or 0.9%, to 3,990.
- The Nasdaq Composite shed 97 points, or 0.9%, to 11,129.
U.S. stocks notched a weekly gain last week for the second time in three weeks. Dow rose 1.8%, while the S&P 500 advanced 1.5% and the Nasdaq gained 0.7%.
What’s driving markets
Wall Street is in line to start the week in a downbeat mood as traders absorb the impact of unrest in China. Hong Kong’s Hang Seng Index
closed off 1.6% as equity indexes across Asia traded lower.
Worries about unrest in China spilled over into commodity markets as well, with West Texas Intermediate crude for January
delivery falling more than 3% at one point to less than $74 per barrel, erasing all of the U.S. benchmark’s year-to-date gains. Meanwhile, copper prices
were off 0.8% to $3.597 per pound.
“Unprecedented waves of protest in China have caused ripples of unease across financial markets, as worries mount about repercussions for the world’s second-largest economy,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“As demonstrations spread across the country from Beijing to Xinjiang and Shanghai, reflecting rising anger about the zero-Covid policy, a sustained recovery in demand across the vast country appears even further away,” Streeter added.
Signs that economic activity in China will continue to be disrupted by the protests, or by more anti-COVID-19 measures, will likely continue to weigh on commodity prices, analysts said.
“China is a rapacious consumer of global commodities and signs economic activity is being disrupted by the mounting dissent in the country will be seen as negative for demand. It’s worth noting that unrest is already affecting business in China including Apple which has seen violent clashes at one of its facilities in Zhengzhou, “ “sais Russ Mould, investment director at AJ Bell.
Concerns about global growth were helping to support government bond markets, with the yield on the 2-year Treasury note
falling 2.5 basis points to 4.451%. Meanwhile, earlier in the day, the yield on the 10-year note
traded at its lowest level since early October.
But the news wasn’t all bad: reports about strong holiday-season online sales from Black Friday helped boost the VanEck Retail ETF
which was up 0.5% at $171.04 as shares of Amazon.com Inc.
were up more than 2%.
“U.S. shoppers spent more than $9 billion in online sales on Friday, and Cyber Monday is also expected to be a record-breaking one, with more than $11 billion to be spent,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“This is not exactly what you expect to hear when you think that the U.S. will enter a consumer-led recession in couple of weeks from now,” she added.
Investors can expect more information about the health of the U.S. economy in what’s shaping up to be a busy week for U.S. economic data: later this week, investors will receive the ADP employment report followed by the November jobs report. Revised data on third-quarter gross domestic product are also due out, along with the Fed’s Beige Book of testimonies about the state of the economy. Finally, a closely watched gauge of inflation is also due. Federal Reserve Chairman Jerome Powell is also due to speak publicly on Wednesday.
- Shares in Apple Inc. AAPL were down 1.3% amid reports it could suffer a production shortfall of 6 million iPhone pros.
- Activision Blizzard Inc. shares traded higher as Wall Street analysts said the stock looked undervalued even if Microsoft Corp.
doesn’t receive clearance for its buyout.
- Shares of DraftKings Inc.
tumbled after J.P. Morgan analyst Joseph Greff turned bearish on the online sports betting and fantasy sports company.
- Shares of some of China’s biggest technology companies saw their U.S.-traded shares surge on Monday despite the unrest at home. Shares of Alibaba Group
and Tencent Holdings
were up big, while the KraneShares CSI China Internet ETF
was more modestly higher.