US stocks lost ground in early trading on Monday, retreating from records after China took a series of moves that pointed to further tensions between the world’s two major economies.
Investors were also preparing for a meeting of policy makers from the Federal Reserve. A flurry of corporate earnings reports, including results from Big Tech heavyweights, are also in the pipeline this week and could set the tone, analysts said.
What are the major indices doing?
The Dow Jones Industrial Average
it was down 64.10 points, or 0.2%, to 34,997.45.
The S&P 500
it fell 1.29 points, less than 0.1%, to 4,410.50.
The Nasdaq Composite
It lost 10.68 points, or 0.1%, to trade at 14,826.31.
The drop came after a week in which US benchmarks rebounded sharply from the July 19 slide to end on record highs on Friday. On Friday, the S&P 500 rose 2% to end its 40th record close of 2021, and the high-tech Nasdaq Composite was up 2.8%. The Dow also pushed to a record close on Friday, ending above the 35,000 milestone for the first time.
What drives the market?
A softer tone in global equity markets was linked to China, such as the Hang Seng
skidded more than 4%, following a crackdown on Tencent’s music licenses and the entire tutoring industry. In pre-market trading, Tencent Music Entertainment
shares fell 14% after China ordered the company to end exclusive contracts with copyright holders.
Hong Kong-listed education stocks fell after Educational training institutions were prohibited from raising money on the stock market.t and foreign capital cannot invest. The crackdown hit US-listed Chinese education stocks on Friday.
The repression occurred as China blamed the US for a stalemate in bilateral ties when the high-level talks began in the Chinese city of Tianjin.
But earnings may soon be back in the spotlight. with this week’s results from top tech companies, including Alphabet Inc.
Y Microsoft Corp.
“The earnings season is now in full acceleration and continues to surprise to the upside so far as most companies are reporting better than expected top and bottom results,” said Peter Cardillo, chief market economist at Spartan Capital Securities, in a note. .
“Despite the ‘fear factor’ about the virus and long-lasting inflation that can sometimes cause minor setbacks, we see the summer rally continuing with indices possibly climbing another 5%,” he said.
US earnings schedule includes EV maker Tesla Inc.
reporting after the close on Monday. This week you will also see the latest interest rate decision from the Federal Reserve and the gross domestic product report for the second quarter.
jumped on monday after Amazon posted an ad seeking an individual to lead the retailer’s crypto effort. A separate report said that Amazon was looking to start accepting bitcoin as payment before the end of the year.
What companies are in focus?
Actions of Hasbro Inc.
increased more than 9% after the toymaker reported an adjusted profit in the second quarter that was more than double the expected, with revenue driven by the strength of the franchise and Wizards of the Coast brands and digital games.
Y Willis Towers Watson PLC
on Monday he announced a mutual agreement for terminate their $ 30 billion merger agreement and ending the litigation with the US Department of Justice Aon shares rose 6.5%, while Willis Towers Watson lost 5.5%.
Stock of popular memes AMC Entertainment Holdings Inc.
rose 2.5%, while GameStop Corp.
it was down 0.6%.
What are other markets doing?
The yield of the 10-year Treasury note
it fell 1.2 basis points to 1.268%. Yields and bond prices move in opposite directions.
The ICE US Dollar Index
a measure of the currency against a basket of six major rivals, it was down 0.1%.
Oil futures are trading lower, with the US benchmark
down 0.7%, while gold futures
they were slightly lower.
In European equities, the Stoxx Europe 600
and the London FTSE 100
each was down 0.1%.