Leading Wall Street indices fell on Monday on concerns about the global economic downturn amid tightening of the US Federal Reserve’s aggressive policy.
Chinese and European stock markets fell, while data showed that oil prices plummeted as China’s economic activity cooled sharply in April as COVID-19 lockdowns wreaked havoc on consumption, industrial production and employment.
Nine out of 11 major S&P sectors declined in morning trade. Technology and consumer discretionary stocks fell 1.6% and 1.8%, respectively.
Large companies such as Amazon.com, Alphabet Inc, Microsoft Corp, Apple Inc, Tesla Inc and Nvidia Corp fell between 1.1% and 2.6%.
Energy shares rose 1.5%.
Wall Street closed sharply on Friday, but the S&P 500 and Nasdaq indices still posted their longest weekly losing streak in more than a decade.
“Investors are a little skeptical. They’re just checking the water to see if the rally is going to go away or not, “said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
“Economically, we are clearly not out of the woods. We haven’t seen the peak of inflation yet, we can re-examine those lows and maybe go even lower. “
Investors are worried that the Fed’s aggressive interest rate hikes in the face of decades of high inflation could push the US economy into recession, exacerbating the conflict in Ukraine, supply chain snarls and the recent epidemic-related lockdown in China.
Monday’s data show that factory activity in New York State fell for the third time in May this year amid falling new orders and shipments.
The S&P 500 and tech-heavy Nasdaq fell 16.2% and 25.8%, respectively, so far this year.
Traders are now setting prices at about 86% chance of a 50 basis point increase by the Fed in June.
At 9:49 am ET, the Dow Jones Industrial Average is down 231.10 points, or 0.72%, at 31,965.56, the S&P 500 is down 37.13 points, or 0.92%, at 3,986.76, and the Composite is down 8241 points. %, At 11,656.42.
The focus is on Tuesday’s retail sales report following last week’s worrying inflation and consumer sentiment data.
Retailers such as Walmart Inc., Home Depot and Target Corp. due to report their quarterly results this week.
Spirit Airlines jumped 8.2% after launching an unfavorable all-cash takeover bid for JetBlue Airways discount carriers. JetBlue shares fell 3.4%. Shares of rival bidder Frontier Group Holdings rose 3.9%.
Netflix Inc rose 1.4% after upgrading Wadebush Streaming Pioneer’s stock from “neutral” to “outperform”.
The numbers are declining for a 1.56-to-1 ratio on the NYSE and a 1.42-to-1 ratio on the Nasdaq.
The S&P index hit a new 52-week high and 29 new lows, while Nasdaq recorded 10 new highs and 60 new lows.