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U.S. Stocks May Move To The Downside Amid Worries About China Covid Surge

wallstreet july25 21nov22 lt

Stocks may move to the downside in early trading on Monday, giving back ground after ending last Friday's choppy session mostly higher. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.

Concerns about the outlook for the global economy may weigh on Wall Street amid a surge in new Covid cases in China.

China reported the death of three people after contracting Covid, marking the first Covid-related deaths that China's mainland has reported since May.

The surge in new cases had led China to impose stringent restrictions in cities like Beijing and Shanghai, shattering recent hopes the country would soon ease Covid curbs.

Trading activity may be somewhat subdued, however, with some traders likely looking to get a head start on the upcoming Thanksgiving Day holiday.

A lack of major U.S. economic data may also keep some traders on the sidelines, although reports on durable goods orders and new home sales are likely to attract attention on Wednesday along with the minutes of the latest Federal Reserve meeting.

Stocks failed to sustain an initial move to the upside and showed a lack of direction over the course of the trading session on Friday. The choppy trading on the day extended the volatility seen over the past several sessions.

The Dow climbed 199.37 points or 0.6 percent to end the day at 33,745.69, and the S&P 500 rose 18.78 points or 0.5 percent to 3,965.34. Meanwhile, the Nasdaq spent the day bouncing back and forth across the unchanged line before closing up just 1.10 points or less than a tenth of a percent at 11,146.06

For the week, the Dow was nearly unchanged, while the S&P 500 slid by 0.7 percent and the Nasdaq slumped by 1.7 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday. China's Shanghai Composite Index fell by 0.4 percent and Hong Kong's Hang Seng Index tumbled by 1.9 percent, although Japan's Nikkei 225 Index bucked the downtrend and edged up by 0.2 percent.

Meanwhile, the major European markets are turning in a mixed performance. While the U.K.'s FTSE 100 Index has inched up by 0.1 percent, the French CAC 40 Index is down by 0.2 percent and the German DAX Index is down by 0.4 percent.

In commodities trading, crude oil futures are sliding $0.55 to $79.53 a barrel after slumping $1.56 to $80.08 a barrel last Friday. Meanwhile, after falling $8.60 to $1,754.40 an ounce in the previous session, gold futures are slipping $8.80 to $1,745.60 an ounce.

On the currency front, the U.S. dollar is trading at 141.75 yen versus the 140.37 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0251 compared to last Friday's $1.0325.

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