Stock futures fell early Monday as social unrest from China’s prolonged Covid restrictions weighed on markets, sending oil prices lower — after Wall Street notched gains during the Thanksgivingholiday-shortened week.
Futures tied to the Dow Jones Industrial Average lost 178 points, or 0.52%. S&P 500 futures were 0.67% lower and Nasdaq 100 futures shed 0.85%.
Over the weekend, demonstrations broke out in mainland China 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 weighed on sentiment in Asia trade, with oil futures hovering around new 2022 lows around demand concerns.
The moves come after all three major U.S. indices ended last week higher, even with the shortened trading time due to the Thanksgiving holiday. The Dow rose 1.78%, and the S&P 500 increased 1.53% during the short week. The tech-heavy Nasdaq is lagging the other two indexes but is still up 0.72% in the same timeframe.
Stocks were lifted during the week by comments from Federal Reserve officials signaling that the central bank would step down its aggressive rate hike path as inflation cools. Minutes from the Fed’s November meeting confirmed the likely shift in policy.
“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” the minutes stated.
In the last week of November, investors will be watching more earnings reports and a slew of economic releases that will give further information on the state of the consumer and the U.S. economy. Intuit, Salesforce and Five Below are scheduled to report earnings. Personal consumption data and the labor report for November will also be released this week.