US stocks fall as oil prices fall, and Chinese stocks fall

US stocks tumbled, oil prices tumbled and Chinese stocks suffered their worst sell-off in more than two years, as Beijing stuck to its Covid-free strategy while facing rising cases in major cities.

The S&P 500 fell 0.8% in the afternoon session on Monday. The technology-focused Nasdaq Composite Index recently gained less than 0.1%, while the Dow Jones Industrial Average lost 0.6%, or about 200 points. On Friday, Dow published his website Worst percentage change for a day Since October 2020, it is down nearly 1,000 points.

Twitter

Shares added about 4%. The social media company is in advanced discussions to sell itself to it

Elon Musk

And Can complete the deal on Mondaysaid people familiar with the matter.

Investors are worried about that strict policies China has a place to fight Covid-19 that will further disrupt global supply chains. Continuing disruptions to manufacturing and the movement of goods since the beginning of the pandemic have contributed to inflation in the United States reaching a level Four decades high. New lockdowns in China and Russia’s war against Ukraine are likely to drive up prices.

“A lot of supply chains are directly affected by China,” said Brian Price, head of investment management at Commonwealth Financial Network. “The longer they are online, the greater the impact of inflation around the world.”

On Monday, the Shanghai Composite and CSI 300 were down 5.1% and 4.9%, respectively. here they are Largest one-day percentage drop For both benchmarks since February 2020, in the early days of the pandemic.

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The offshore yuan fell about 1% to trade at around 6.59 per dollar. This was the lowest since November 2020, according to FactSet. This pullback was built on last week’s selling which ended months of relative stability.

With Shanghai still in lockdown amid China’s largest outbreak of Covid-19, residents are turning to social media to vent about food shortages or are bargaining with neighbours. Anxiety and hunger prompt many to question Beijing’s anti-epidemic strategy. Photo: Chinatopix via AP

“The problem with inflation is that it can become embedded and we see inflation become very flat,” said Sebastian Mackay, multi-asset fund manager at Invesco. “What we’re seeing is a combination of the war in Ukraine and the shutdown in China causing supply problems.”

Restricted movement in China may also drain oil demand. Brent crude, the international oil benchmark, fell 5.6 percent to $100.20 a barrel. Despite the decline, oil prices remain close to historically high levels due to fears of turmoil in energy markets from the Russian invasion of Ukraine.

Energy stocks fell 5.5%, topping the decliners in the Standard & Poor’s 500 Index. Shares

Schlumberger

decreased 9.5%

Halliburton

decreased 8.1% and

APAAnd

Apache Corp.

The parent company’s stock fell 7.7%.

In other corporate news, share

coca cola

It was recently increased by 0.3%. The company said so Recorded higher sales For the last quarter with continued demand in the face of rising prices.

Advanced Micro Devices

It rose 2.4% after an analyst Raymond James upgraded his assessment of the chipmaker’s shares.

whirlpool Earnings will be reported after market closes.

High inflation caused the Federal Reserve to increase efforts to combat it. Last week, Federal Reserve Chairman Jerome Powell indicated that the central bank is ready for it Tighten monetary policy more quickly It indicated that it was likely to raise interest rates by half a percentage point at its meeting in May.

Investors seem to be considering whether a bigger rally is still possible, Price said. “This has scared some investors,” he said.

Money managers are concerned that large increases in federal interest rates could slow economic growth or even push the economy into recession. Mr. Mackay said this could lead to a situation where the Fed would have to raise interest rates in the short term but cut them in the long term.

The Cboe Volatility Index – the so-called Wall Street fear gauge, also known as VIX – rose to 30.40, near its highest level since mid-March.

The yield on the benchmark 10-year Treasury fell to 2.789% on Monday from 2.905% on Friday as investors sought safer assets to hold. Yields and prices move inversely. The Wall Street Journal dollar index, which measures the dollar against a basket of currencies, rose 0.6%.

The Dow Jones Industrial Average on Friday posted its worst one-day percentage change since October 2020.


picture:

Brendan McDermid/Reuters

Gold futures fell 1.7 percent to $1,901.00 an ounce. While gold has historically been seen as a hedge against inflation, it pays no yield, making it less attractive than government bonds at a time when interest rates are rising. The cost of buying gold, denominated in dollars, is also more expensive for foreign investors when the dollar is rising.

BitcoinThe world’s largest cryptocurrency by market capitalization, fell 1.8% of its dollar value at 5 p.m. ET on Sunday to trade at $38815.22 on Monday. Cryptocurrencies can move in line with the broader market sentiment, with investors buying the riskiest and most volatile assets when the sentiment is strong and selling when the weakest.

Offshore, the Stoxx Europe 600 Index closed 1.8% lower. South Korea’s Kospi Index fell 1.8%, and Japan’s Nikkei 225 Index contracted 1.9%.

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Write to Caitlin Ostroff at [email protected] and Justin Baer at [email protected]

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