US stocks fell, suggesting that major indexes will fluctuate after a sell-off that pushed the S&P 500 down for six consecutive weeks.
The S&P 500 was down 0.4%. The Dow Jones industrial average fell 0.2%, while the technology’s Nasdaq Composite Index fell 0.6%.
The S&P 500 suffered its worst weekly loss since June 2011, even after earning a profit on Friday, and flirted with bear market territory, 20% lower than the recent peak.
Investors worried that the Federal Reserve was late in noticing the risks of rising inflation fears that the central bank will act too aggressively to fight it, a mistake that could drive the economy into recession.
The resulting sell-off, which was complicated by the war in Ukraine and the blocking of Covid-19 in China, was widespread, affecting most assets from cryptocurrencies and stocks to government bonds, leaving investors unsure where to look for safety.
After weeks of losses, some investors are holding stocks or buying more, hoping the decline will peak. Others are established for a long period of volatility.
“We are entering a more challenging time for the markets. We need to see signs that inflation is not just reaching its peak, but is actually slowing down before you find a stable bottom in the market. It will take at least a few months, “said David Donabedian, chief investment officer at CIBC Private Wealth.
“This does not mean that we will not have higher counter-rallies day by day, but I think it is a long, long process and largely based on data,” he said.
Shares of Twitter fell 3.6 percent after the opening bell, after Elon Musk said on Saturday that the company’s legal team accused him of violating a non-disclosure agreement. Mr Musk Friday said his $ 44 billion acquisition of social media company was “pending”, with shares falling nearly 10 percent.
Spirit Airlines jumped 9.3 percent after The Wall Street Journal reported that JetBlue Airways plans to launch a hostile attempt to take over the carrier at a discount.
In the bond markets, the yield on the benchmark 10-year US government bond fell to 2.90% from 2.932% on Friday.
In raw materials, crude Brent, the international oil index, fell 0.1% to $ 111.45 a barrel. Gold prices fell 0.2%.
Traders worked on the floor of the New York Stock Exchange on Friday.
Photo: BRENDAN MCDERMID / REUTERS
Overseas, the Pancontinental Stoxx Europe 600 was flat. In mainland China, major stock indexes fell after weaker-than-expected data showed the economic cost of severe blockades imposed to control Covid-19 outbreaks. Retail sales fell about 11% year-on-year in April, while industrial production shrank 2.9% on the same basis, while growth in fixed asset investment slowed.
The CSI 300 index, which tracks the 300 largest companies registered in Shanghai or Shenzhen, fell 0.8 percent, while the broader Shanghai Composite lost 0.3 percent. Continental property stocks improved, jumping 1.6 percent after Chinese authorities lowered the minimum interest rate on mortgages provided to buyers for the first time.
“Economic data in April confirmed investors’ concerns about China’s slowdown,” said Tai Hui, chief market strategist for Asia at JP Morgan Asset Management in Hong Kong. Although Shanghai has unveiled a reopening plan and domestic Covid-19 cases are declining, investors expect only a gradual recovery in the coming weeks and months, he said.
However, US markets have sold out significantly in recent weeks, in part due to fears of disruptions in China’s supply chain, so weak data is unlikely to have a major impact on broader global markets, Mr Hui said.
Elsewhere in Asia, Tokyo’s Nikkei 225 rose 0.5 percent, while South Korea’s Kospi Composite fell 0.3 percent.
-Rebecca Feng contributed to this article.
Write to Will Horner at william.horner@wsj.com
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