Shares on Wall Street fell further Monday as new data from China raised new concerns about the outlook for the global economy for investors already wary of high inflation, rising interest rates and ongoing supply chain disruptions.
The S&P 500 fell 1.7 percent in early trading, adding to a five-week run of declines that sent the index down nearly 14 percent through Friday.
China’s exports slowed significantly in April as the country’s lockdowns continued to put millions of workers inactive. According to analysts at S&P Global, a research firm, exports of Chinese steel, a barometer of global growth, are unlikely to improve much in May. Chinese Prime Minister Li Keqiang warned this weekend that the current state of the country’s job market is “complicated and serious”.
The decline in Wall Street followed sharp falls in world markets. The Stoxx Europe 600 fell 1.8 percent, while the Hang Seng index in Hong Kong fell 3.8 percent.
The oil price fell. Brent oil, the global benchmark, fell about 2.6 percent to $109.43 a barrel, and West Texas Intermediate, the US benchmark, fell 2.8 percent to about $106.65.
Stocks have been battered in recent weeks as investors contend with higher interest rates, which the Federal Reserve started raising from near zero in March, and further supply chain disruptions. The S&P 500 is coming off its fifth consecutive weekly decline, the longest streak of losses since June 2011.
On Friday, the latest data on hiring in the United States raised concerns about how the Fed will continue to tighten monetary policy. Wall Street was erratic all week, with indices fluctuating between huge gains and losses and government bond yields above 3 percent.
Bond yields, a proxy for investor expectations about interest rates, were little changed Monday. The yield on 10-year government bonds remained at 3.1 percent.
In 2021, there was seemingly no bad news that the US stock market could shut down, with the S&P 500 gaining 26.9 percent. In addition, trading was remarkably calm given the uncertainty surrounding the coronavirus.
But the volatility and losses that came with recessions are back.
In 2021, the index saw a daily gain or loss of more than 2.5 percent just once, on Jan. 27, when meme stocks like GameStop and AMC Entertainment spiked into a speculative frenzy and the Federal Reserve said a resurgent coronavirus was on the rise. economy busy. recovery.
This year there have already been seven days with gains or losses of at least 2.5 percent – about one in every 12 trading days. All those big daily changes were in March, April and May.
Series of large gains and losses are more typical of recessions and the periods that follow. Before the pandemic wreaked havoc on the stock market in 2020, the last set of major changes was in 2007-11, during the financial crisis and its recovery. Before that, the dotcom boom and bust and the September 11 attacks created volatility.
Outside of such large events, it is more common for there to be only a few major changes per year. In fact, there have been many years without such large movements: 10 in the last 30 years.
Claire Fu contributed to this report.
