The DJIA lost 497.57 points, or 1.45%, to end at 33,849.46, the S&P 500 dropped 1.54% to end at 3,963.94 and the Nasdaq Composite ended down 1.58% to close at 11,049.50
Stocks closed lower Monday as social unrest from China’s prolonged Covid restrictions weighed on markets.
The Dow Jones Industrial Average lost 497.57 points, or 1.45%, to end at 33,849.46. The S&P 500 dropped 1.54% to end at 3,963.94. The Nasdaq Composite ended down 1.58% to close at 11,049.50.
Monday’s selloff was driven by demonstrations that broke out in mainland China over the weekend as people vented their frustrations with Beijing’s zero-Covid policy. Local governments tightened Covid controls as cases surged, even though earlier this month Beijing adjusted some policies that suggested the world’s second-biggest economy was on its way to reopening.
The developments reverberated across global markets in Monday trading, with West Texas Intermediate crude futures briefly dipping to their lowest price since last December.
Shares of companies with big production facilities in China were under pressure. Apple dropped 2.6% after Bloomberg reported that unrest at a factory in China could mean 6 million fewer iPhone Pro units for the year.
When you look at Apple not being able to fulfil the orders for their iPhone because the factories in China are shut down, I think that’s a perfect example of how something in one country can affect somewhere else, said Victoria Fernandez, chief market strategist at Crossmark Global Investments. It just has a ripple effect through the global economy when you have something as large as the Chinese economy shutting down.
Market observers expect more volatility ahead as investors digest a raft of economic data coming later this week that will offer further information on the state of the U.S. economy. Key releases include Thursday’s personal consumption expenditures report – a key inflation measure for the Federal Reserve – and November payrolls report, scheduled for Friday.
