Stocks fell broadly on Wall Street Monday as protests spread in China calling for President Xi Jinping to step down amid growing anger over severe restrictions imposed as part of his "zero COVID" strategy in the world’s second-largest economy. The S&P 500 fell 62.18 points, or 1.5%, to 3,963.94, wiping out all of the benchmark index's gains from last week. The Dow Jones Industrial Average dropped 497.57 points, or 1.4% to 33,849.46. The tech-heavy Nasdaq lost 176.86 points, or 1.6%, to close at 11,049.50. More than 90% of the stocks in the S&P 500 closed in the red, with technology companies the biggest weights on the broader market, the AP reports.
Apple, which has seen iPhone production hit hard by lockdowns in China, fell 2.6%. Banks and industrial stocks also were among the biggest drags on the market. JPMorgan fell 1.8% and Boeing slid 3.7%. The world's second largest economy has been stifled by a "zero COVID" policy which includes lockdowns that continually threaten the global supply chain at a time when recession fears hang over economies worldwide. The recent demonstrations there are the greatest show of public dissent against the ruling Communist Party in decades. The unrest stoked worries on Wall Street that if Xi cracks down even further on dissidents there or expands the lockdowns, it could slow the Chinese economy, which would hurt oil prices and global economic growth, says Sam Stovall, chief investment strategist at CFRA.
"A lot of people are worried about what the fallout will be, and basically are using that as an excuse to take some recent profits," Stovall says. Wall Street is coming off of a holiday-shortened week that was relatively light on corporate news and economic data. Investors have a busier week ahead as they continue monitoring the hottest inflation in decades and its impact on consumers, business, and monetary policy. Federal Reserve Chair Jerome Powell will speak at the Brookings Institution about the outlook for the US economy and the labor market on Wednesday. A report about job openings and labor turnover for October will be released on Wednesday, followed by a weekly unemployment claims report on Thursday. The closely-watched monthly report on the job market will be released on Friday.
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