NEW YORK (AP) — Stocks fell broadly in morning trade on Wall Street on Monday, as worries about rising inflation and interest rate hikes weighed on investors and prolonged market losses.
The S&P 500 fell 1.2% at 10:19 a.m. EST, and more than 90% of stocks in the index lost ground. The drop follows a weak end last weekend that sent the benchmark index sinking for a third straight week.
The Dow Jones Industrial Average fell 371 points, or 1.1%, to 33,440 and the Nasdaq fell 0.6%.
US stocks are tracking global markets lower, particularly in China, on fears that tough lockdown measures there could jeopardize the world’s second-largest economy and potentially hurt global economic growth. Hong Kong’s Hang Seng fell 3.7%. The Shanghai Composite fell 5.1%.
China’s capital, Beijing, began mass testing of more than 3 million people on Monday and restricted residents of part of the city to their compounds, raising concerns about a broader lockdown similar to Shanghai. This city has been closed for more than two weeks and this has already prompted the International Monetary Fund to revise downwards its growth forecasts for the Chinese economy.
Prices for ultra-safe US government bonds rose as traders feared the risk. The 10-year Treasury yield, which affects rates on mortgages and other consumer loans, fell significantly to 2.78% from 2.90% on Friday evening.
Energy companies were among the biggest losers as US crude oil prices fell 5.6%. Exxon Mobil fell 5.2%.
Banks and technology stocks also fell sharply. Bank of America fell 3.2% and Apple 1.6%.
Twitter rose 3.4% and was one of the few bright spots in the market. The social media company and Tesla CEO Elon Musk is reportedly negotiating a takeover offer.
Rising inflation remains a major concern for investors. Investors continue to focus on actions taken by central banks to mitigate the impact on businesses and consumers. The Federal Reserve Chairman indicated that the central bank may raise short-term interest rates to double the usual amount at upcoming meetings, starting next week. The Fed has already raised its overnight rate once, the first such hike since 2018.
Investors have a heavy week of corporate earnings ahead. Reactions to the latest round of corporate report cards were mixed, and several disappointing earnings reports last week rattled what was the market’s main pillar of support.
Beverage giant Coca-Cola was virtually unchanged on Monday after reporting strong financial results. Parent company Google, Alphabet and General Motors will release their results on Tuesday, along with Microsoft and Visa. Boeing, Ford and Facebook parent Meta are on deck to report results on Wednesday.
Thursday is a particularly busy day and will include reports from industrial giant Caterpillar, McDonald’s, Amazon and Apple, among others.
Wall Street will also receive key economic data this week. The Conference Board will release its consumer confidence measure for April on Tuesday. The Commerce Department will release its first-quarter gross domestic product report on Thursday.
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