U.S. stock futures fell alongside oil prices on Monday, as investors juggled concerns over the pace of Federal Reserve rate hikes with news of more lockdowns in China amid rising COVID cases.
How are stock-index futures trading?
- S&P 500 futures ES00,
-0.86%dropped 31 points, or 0.7%, to 4,236
- Dow Jones Industrial Average YM00,
-0.71%fell 195 points, or 0.6%, to 33,529
- Nasdaq-100 futures NQ00,
-0.93%dropped 111 points, or 0.8%, to 13,240
On Friday, the Dow industrials DJIA,
For the week, the Dow was down 1.9%, the S&P 500 fell 2.8% and the Nasdaq dropped 3.8%, according to FactSet.
What’s driving the markets?
Following the end week meltdown, stock futures began tumbling on Sunday evening, as news of fresh COVID lockdowns in China added to worries for already jittery investors.
Beijing began testing millions of residents and shutting down business districts and some residential areas on Monday amid a spike in infections. Millions in Shanghai remain under restrictions as that financial hub has struggled with rising infections.
“More lockdowns reduce demand for commodities in the short-term which is an easing factor for commodity inflation, but lockdowns also create bottlenecks in the world’s factory which causes more delays and potentially inflation in consumer markets in the U.S. and Europe,” strategists at Saxo Bank told clients in a note.
China’s CSI 300 000300,
The People’s Bank of China said later on Monday that it was cutting its foreign exchange deposit reserve ratio by 1 percentage point, to 8%.
Investors piled into bonds and the dollar, but not gold.
Markets are facing a busy week on the economic front, as the Fed is now in a blackout period ahead of the May 3-4 Federal Open Market Committee meeting. The March core personal-consumption expenditures price index, the central bank’s favored inflation indicator, is due Friday. The data calendar is empty for Monday.
Wall Street is also bracing for a busy earnings week, with quarterly reports due from Apple AAPL,
“As technology companies are the biggest constituents in the main indices, it’s crucial how these companies perform on earnings this week, but also that they can demonstrate less impact from inflation,” added Saxo strategists.
European stocks also tumbled Monday, getting no lift from news French President Emmanuel Macron was elected for a second term, defeating far-right challenger Marine Le Pen.
What companies are in focus?
- Twitter Inc. TWTR,
+3.93%shares climbed 5% in premarket trading. The micromessaging service, which reports earnings on Thursday, is reportedly re-evaluating a takeover bid by Tesla CEO Elon Musk. Tesla Inc. :tsla TSLA, -0.37%
How are other assets trading?
- The ICE U.S. Dollar Index DXY,
- Bitcoin BTCUSD,
-1.59%fell 3% to at $38,501.
- Gold GC00,
-1.55%fell $25.50, or 1.3% to $1,908.80 an ounce.
- The Stoxx Europe 600 SXXP,
-1.69%fell 1.7% while London’s FTSE 100 UKX, -1.83%fell 2%.
- The Shanghai Composite SHCOMP,
-5.13%fell 5.1%, while the Hang Seng Index HSI, -3.73%fell 3.7% in Hong Kong and Japan’s Nikkei 225 NIK, -1.90%fell 1.8%.
Mike Murphy contributed to this article