Stocks Tumble as Demonstrations in China Impair Market Sentiment

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Last Updated on November 28, 2022 by Bitfinsider

Stocks dipped on Monday as social turmoil from China’s extended Covid restrictions dragged on markets, bringing oil prices down – despite Wall Street’s gains over the holiday-shortened week.

The Dow Jones Industrial Average slid 171 points, or 0.5%, throughout the day. The S&P 500 and the Nasdaq Composite both fell 0.7% and 0.8%, respectively.

Protests erupted in mainland China over the weekend as individuals aired their displeasure with Beijing’s zero-Covid policy. Local governments strengthened Covid limits as cases increased, despite Beijing adjusting certain rules earlier this month that showed the world’s second-largest economy was on its approach to reopening.

The events rippled throughout global markets. Oil futures are hanging at fresh 2022 lows due to supply fears.

Shares of corporations with significant manufacturing operations in the nation were under pressure. Apple fell 1.5% after Bloomberg reported that turmoil at a Chinese manufacturing might result in 6 million fewer iPhone Pro devices sold this year.

“You can’t rewire the supply chain overnight,” said Mohamed El-Erian, Allianz’s senior economic counselor. “So, what does this mean for those businesses?” It indicates supply unpredictability.”

The movements come after all three main U.S. stocks finished last week higher, despite the fact that trade was limited due to the Thanksgiving holiday.

Stocks rose this week as Federal Reserve policymakers signaled that the central bank might ease up on its aggressive rate hikes if inflation eased. The minutes of the Fed’s November meeting reaffirmed the expected policy move.

This week, investors will be monitoring for additional earnings reports as well as a spate of data releases that will provide further information on the status of the consumer and the US economy. Personal consumption statistics and the November labor report will also be revealed.

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