US stock futures plunge as China COVID-19 fears resurface

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U.S. stock futures fell on Monday in sympathy with Asian and European stock markets as another round of COVID-19 shutdowns in China rattled investors.

How stock index futures are traded

  • S&P 500 ES00 futures contracts,
    -0.48%
    fell 22 points, or 0.6%, to 3,952

  • Futures contracts Dow Jones Industrial Average YM00,
    -0.26%
    fell 110 points, or 0.3%, to 33,665

  • Nasdaq 100 NQ00 futures,
    -0.59%
    fell 80 points, or 0.6%, to 11,628

On Friday, the Dow Jones Industrial Average DJIA,
+0.59%
rose 199 points, or 0.59%, to 33,746, the S&P 500 SPX,
+0.48%
rose 19 points, or 0.48%, to 3,965, and the Nasdaq Composite COMP,
+0.01%
gained 1 point, or 0.01%, to 11146.

What drives the markets?

The shortened holiday week began with investors in “anti-risk” mode as new COVID-19 lockdowns in China rekindled concerns about the global economy.

Wall Street will be closed on Thursday for the US Thanksgiving holiday and trading will likely be very weak for Black Friday, when the festive shopping season kicks off in earnest.

Asian ADOW,
-1.19%
and European stocks SXXP,
-0.12%
followed U.S. stock futures lower after the Chinese government introduced new restrictions in the world’s second-largest economy following fresh outbreaks of COVID-19.

Worries over falling demand from the world’s largest manufacturer have pushed down prices for industrial metals like HG00 copper,
-1.07%,
and forced US crude oil CL.1,
-0.46%
0.5% down to $79.71 a barrel, close to its lowest since late September.

Financial markets have taken a chill amid concerns that rising COVID cases in China and further tightening of restrictions will send a fresh chill to manufacturing output and depress demand for raw materials,” said Susannah Streeter. , Principal Investment and Market Analyst at Hargreaves Lansdown. .

Signs of risk aversion and a perceived flight to safe havens could be seen in forex and bonds, where the DXY dollar index,
+0.83%
reversed its recent fall to gain 0.8% to 107.76 and the 10-year Treasury yield TMUBMUSD10Y,
3.836%,
which moves in the opposite direction to prices, fell 1.7 basis points to 3.811%

“The bears are on the prowl today as investors have no choice but to adapt to downside risk,” said Stephen Innes, managing partner at SPI Asset Management.

Atlanta Fed President Raphael Bostic said Saturday he was willing to slow the pace of interest rate hikes and saw a possible maximum or terminal rate of 5% for that. cycle.

San Francisco Fed President Mary Daly is scheduled to speak on inflation Monday at 1 p.m. ET. The Fed will release the minutes of its last rate-setting meeting at 2 p.m. Wednesday.

Disney shares DIS,
+0.38%
were a feature of the premarket stock, gaining 8% after Bob Iger returned as chief executive.

It’s a lean week for US economic data, much of which is pushed back to Wednesday, ahead of Thanksgiving the next day and no reports are scheduled for Black Friday either.

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