(Bloomberg) — U.S. stocks fell as concerns mount that China may tighten Covid restrictions after a spate of reported deaths. Concerns about the growth outlook in the US, as the Federal Reserve vows to be persistent in fighting inflation, also continue to weigh on investors.
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The S&P 500 was dragged down by the technology and energy sectors. The Nasdaq 100 was pushed lower by declines in Apple Inc., Amazon.com Inc. and Tesla Inc., Walt Disney Co. challenged risk-off sentiment that swept markets after bringing back former leader Bob Iger to replace his successor Bob Chapek as CEO.
Oil plunged on concerns about weakening demand prospects from China and on news that Saudi Arabia is considering an OPEC+ increase of up to 500,000 barrels per day. The dollar gained as investors sought safe haven assets. Treasuries rose, with the 10-year yield hovering around 3.78%.
China saw its first Covid-related death in almost six months on Saturday and another two were reported on Sunday. Worsening outbreaks across the country are stoking concerns that authorities may again resort to harsh restrictions.
The weakening of the offshore yuan against the dollar on Monday is the “biggest negative macro factor price driver for the S&P 500,” said Charlie McElligott, managing director of cross-asset strategy at Nomura Securities International.
“This renewed dollar strength is also contributing to tighter ‘dollar liquidity’ while also acting as a drag on US stocks, from the S&P 500 to the Nasdaq to Russell,” he said.
This week, traders will also be watching the minutes of the most recent Federal Reserve policy meeting for more clues on the course of rate hikes.
“For the Fed right now, if we have a slowdown in inflation, which it looks like we could do, but you’re not seeing it in the slowdown in service inflation, that’s related to a tight labor market,” Veronica Clark. , an economist at Citigroup, said Monday on Bloomberg Television. “You need to see that easing in the labor market data.”
Atlanta Fed President Raphael Bostic said he favors slowing the pace of interest rate hikes, with no more than 1 percentage point more hikes, to try to ensure the economy has a soft landing. . Boston Fed President Susan Collins reiterated her view that there are options open for the size of the December interest rate hike, including the possibility of a 75 basis point move.
Key events this week:
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US Richmond Fed Manufacturing Index, Tuesday
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OECD publishes Economic Outlook on Tuesday
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The Fed’s Loretta Mester and James Bullard spoke Tuesday
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S&P Global PMI: US, Eurozone, UK, Wednesday
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US MBA Mortgage Applications, Durable Goods, Initial Jobless Claims, University of Michigan Sentiment, New Home Sales, Wednesday
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Federal Reserve minutes for November. 1-2 meeting, Wednesday
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ECB publishes report of its October policy meeting, Thursday
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US stock and bond markets are closed for the Thanksgiving holiday, Thursday
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US stock and bond markets close early on Friday
Some of the main movements in the markets:
Stocks
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The S&P 500 fell 0.6% at 10:56 a.m. New York time
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The Nasdaq 100 fell 0.9%.
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The Dow Jones industrial average fell 0.3%.
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The Stoxx Europe 600 was little changed
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The MSCI World Index rose 0.6%.
coins
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The Bloomberg Dollar Spot Index rose 0.7%.
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The euro fell 0.8% to $1.0245
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The British pound fell 0.8% to $1.1789
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The Japanese yen fell 1% to 141.82 per dollar
CRYPTOCURRENCIES
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Bitcoin fell 0.8% to $16,119.66
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Ether fell 1% to $1,130.09
Captivity
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The yield on the 10-year Treasury fell four basis points to 3.78%.
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Germany’s 10-year yield fell four basis points to 1.98%
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Britain’s 10-year yield fell seven basis points to 3.17%
raw Materials
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West Texas Intermediate crude fell 5.7% to $75.55 a barrel
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Gold futures fell 0.9% to $1,753.90 an ounce.
This story was produced with the assistance of Bloomberg Automation.
–With the assistance of Peyton Forte and Isabelle Lee.
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