US stocks look to bounce after early sell-off pressure

US stocks fell in early trades on Monday as negative sentiment across global equities intensified.

After closing sharply lower last week, US indexes extended losses in the morning session on Monday, even as jitters around more COVID-related lockdowns in China hit investors. The declines also follow uncertainty over the US Federal Reserve’s hint of more aggressiveness in its monetary policy approach.

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The S&P 500 was down more than 1.5% in mid-day trading, extending the weakness seen at the opening bell. However, a slight uptick has seen the blue-chip index pare some of the losses to -0.7% (at 1:35 ET)

The outlook was the same for the Dow Jones Industrial Average (DJIA), which had shed over 400 points, down 1.2% at one point. The Dow was 140 points down in early afternoon trading. Last Friday, the Dow fell nearly 1000 points as widespread sell-off saw stocks post a fourth consecutive week of losses. 

The Nasdaq Composite lost over 1% in early trading but had recovered somehow to sit +0.2% down.

Elsewhere, US Treasury yields also dropped, with the benchmark 10-year yield tapping 2.779%. Oil continued to suffer as the US crude fell more than 5% to $96.36 a barrel, while gold prices were nearly 2% down at $1,897 per ounce.

Sell-off across Asian and European markets

While Wall Street was struggling with pressure on Monday, the outlook on global stocks had taken a damper in Asia and in Europe.

Sell-off saw China’s Shanghai Composite slide 5.1% for its worst single-day performance since February 2020. Japan’s Nikkei 225 fell 1.9% and Hong Kong’s Hang Seng index plummeted 3.7% in Monday’s trading.

The sell-off in Asian stocks was also mirrored across Europe as jitters over new infections and lockdowns in China impacted risk-on appetite among European investors. The negativity was also down to the broader concern over inflation and new sanctions on Russia.

The pan-European Stoxx 600 index closed 1.8% down while France’s CAC fell 2% and Germany’s DAX shed 1.5%. In Britain, the FTSE 100 closed 1.9% lower.

Twitter stock up

Twitter (NYSE: TWTR) shares had surged nearly 5% in early trading Monday. This followed news reports that Elon Musk was on the verge of succeeding in his quest to buy the company. TWTR was priced at $51.36, about 4.87% higher on the day.

Netflix Inc (NASDAQ: NFLX) and Walgreens Boots Alliance Inc (NASDAQ: WBA) are among the biggest losers on the day. Chevron, Verizon and Nike stocks were the other big losers.