Dow Futures Waver, Oil Prices Slip, Chinese Data Weigh on Growth Fears—and What Else Is Happening in the Stock Market Today
Stocks have sold off in recent weeks amid investor worries over inflation and growth.
Ed Jones/AFP via Getty Images
Stocks wavered as weak data out of China revealed how Covid-19 lockdowns have weighed on the world’s second-largest economy, adding to investors’ concerns around global growth.
Futures for the Dow Jones Industrial Average retreated 30 points, or 0.1%, after the index rallied 466 points on Friday to close at 32,196. S&P 500 futures signaled a start 0.3% into the red with the technology stock-heavy Nasdaq poised to slip 0.5%.
Overseas, the pan-European Stoxx 600 was 0.1% lower and the Shanghai Composite lost 0.3%.
As stocks sold off over the past few weeks—the S&P 500 is down more than 8% in the past month—investors’ concerns have centered on the risk of recession.
The global picture darkened on Monday as economic data from China—where the capital city and financial hub, Shanghai, has been under lockdown since March—revealed the stark impact of Covid-19 restrictions across the country.
“Markets managed a big bounce on Friday but the mood has soured again in the Asian session after a weak slew of data from China as Covid lockdowns had an even worse impact than expected,” said Jim Reid, a strategist at Deutsche Bank.
“Industrial production, retail sales and property investment all crashed through estimates by a large margin,” Reid added, noting that the decline in retail sales and industrial production in April was the weakest since March 2020
The Chinese data also saw oil prices fall, with prices for U.S. benchmark West Texas Intermediate crude falling 1% to $109 a barrel amid fears of dwindling demand in energy-hungry China.
The Federal Reserve is expected to act aggressively with further interest-rate increases as it fights inflation at a four-decade high, and the worry is that tighter monetary policy will dent economic growth to the point of causing a recession. The Russia-Ukraine war—which has roiled commodity markets—and Covid-19 lockdowns in China only complicate the picture, weighing on global growth and stoking inflation through the disruption of global supply chains.
“For most investors, trying to time the market is likely to prove time-consuming and loss-making. Investor sentiment is fickle, and markets are likely to remain choppy until we get greater clarity on the 3Rs—rates, recession, and risk,” said Mark Haefele, the chief investment officer at UBS Global Wealth Management.
Write to Jack Denton at [email protected]
