The Dow Jones industrial average plunged more than 1,000 points at the open and remained below its session low for most of the day. The S&P 500 index dropped about 3 percent in Monday trading amid a wave of declines from all major indexes overseas.
The “why is the stock market falling today” is a question that many people ask. The stocks open lower as oil prices and Chinese shares fall.
As Beijing persists to its zero-Covid stance despite rising cases in key cities, U.S. markets plummeted, oil prices plunged, and Chinese stocks experienced their worst selloff in more than two years.
The S&P 500 retreated 0.7% in early trading Monday. The tech-focused Nasdaq Composite Index fell 0.6% and the Dow Jones Industrial Average lost 0.7%. The Dow on Friday posted its worst one-day percentage change since October 2020, tumbling nearly 1,000 points.
Twitter’s stock rose 3.5 percent on reports that the social media firm is in advanced talks to sell itself to Elon Musk and might close a deal as soon as Monday, according to individuals familiar with the situation.
Coca-stock Cola’s rose 1.9 percent after the company reported greater sales in the most recent quarter, despite price hikes.
Investors are concerned that China’s strong anti-Covid-19 laws may further disrupt global supply chains. Since the beginning of the epidemic, continued interruptions in production and the transit of products have led to U.S. inflation hitting a four-decade high. Price hikes are anticipated to be exacerbated by new Chinese restrictions and Russia’s conflict against Ukraine.
The Shanghai Composite and CSI 300 indices both dropped 5.1 percent and 4.9 percent on Monday. Both benchmarks had their worst single-day percentage drops since February 2020, when the epidemic was just getting started.
The offshore yuan lost almost 1% of its value against the dollar, trading at about 6.59 per dollar. According to FactSet, this was the lowest since November 2020. The drop followed a selloff last week that brought months of relative steadiness to an end.
Residents are using social media to whine about a lack of food or bartering with neighbors as Shanghai remains shut down due to China’s worst Covid-19 outbreak. Many people are questioning Beijing’s pandemic policy because to anxiety and hunger. Photo courtesy of Chinatopix and the Associated Press.
“The issue with inflation is that it can get ingrained, and we’re seeing it becoming extremely sticky,” Sebastian Mackay, a multiasset fund manager at Invesco, said. “We’re witnessing supply challenges as a result of a combination of the fighting in Ukraine and China’s shutdown.”
The restriction of mobility in China may potentially reduce demand for oil. Brent crude lost 5.6 percent to $100.25 a barrel, the worldwide benchmark for oil. Despite the drop, oil prices are still around record highs owing to fears of energy market disruptions as a result of Russia’s invasion of Ukraine.
The Federal Reserve has increased its efforts to counteract rising inflation. Last week, Fed Chairman Jerome Powell said that the central bank is prepared to tighten monetary policy more swiftly, predicting that interest rates will be raised by a half-percentage point at its May meeting.
Money managers are concerned that the Federal Reserve’s relentless interest-rate hikes may hinder economic growth or perhaps push the country into recession. According to Mr. Mackay, this could force the Fed to raise interest rates in the short term while cutting them in the long run.
The Cboe Volatility Index (VIX), Wall Street’s so-called fear gauge, climbed to 29.12, its highest level since mid-March.
As investors chose safer assets to retain, the yield on the benchmark 10-year Treasury note fell to 2.785 percent on Monday from 2.905 percent on Friday. Yields and prices move in opposite directions. The Wall Street Journal Dollar Index, which compares the value of the dollar to a basket of currencies, increased by 0.4 percent.
Friday became the Dow Jones Industrial Average’s worst one-day percentage decline since October 2020.
BRENDAN MCDERMID/REUTERS/BRENDAN MCDERMID/REUTERS/BRENDAN MCDERMID/REUT
The price of gold futures dropped 1.7 percent to $1,901.00 per troy ounce. While gold has long been thought of as an inflation hedge, it offers no return, making it less appealing than government bonds in times of increasing interest rates. When the dollar rises, international investors find it more costly to acquire gold, which is denominated in dollars.
After the market closes, Whirlpool will release its profits.
Bitcoin, the world’s most valuable cryptocurrency, dropped 1.8 percent from its dollar value at 5 p.m. ET on Sunday to $38,815.22 on Monday. Investors purchasing riskier, more volatile assets when sentiment is high and selling when sentiment is weak might cause cryptocurrency prices to move in lockstep with wider market mood.
Overseas, the Stoxx Europe 600 index dropped 1.3 percent. The Kospi in South Korea fell 1.8 percent, while the Nikkei 225 in Japan fell 1.9 percent.
—This article was co-written by Justin Baer.
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Caitlin Ostroff can be reached at [email protected]
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Amazon stock is down today, with the company’s shares falling by 2.5% after the opening bell. Oil prices are also dropping, which means that stocks in general are not doing well as of today. Reference: amazon stock.
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