Benchmarks for U.S. stocks were down midday, with the S&P 500 extending its longest streak of weekly losses in more than a decade, while government bonds rose as investors weighed the risks of a higher inflation and lower economic growth.
The Dow Jones Industrial Average fell 1.3% to 32,474.3, with the S&P 500 down 2% to 4,039.8 and the Nasdaq Composite down 2.7% to 11,815.2 on Monday in early afternoon. The S&P 500 ended down last week for the fifth consecutive time, its longest losing streak since 2011, according to a research note by DA Davidson.
Technology, Energy and Consumer Discretionary were among the biggest decliners on Monday, while the Consumer Staples sector was the lone gainer.
The US 10-year rate fell 3.5 basis points to 3.09%.
The consumer price index in the United States rose 8.5% a year in March, data showed last month. The April reading is due Wednesday, with market consensus for a still-hot 8.1%.
“We are living in the most chaotic and difficult to predict macroeconomic period in decades,” Seth Carpenter, chief economist at Morgan Stanley, said in a research note. “Fears of a global recession abound, and over the past three months we have revised down our global growth forecast from 170 [basis points] as inflationary pressures have increased.”
Carpenter said while he recognizes the risk, he hasn’t definitely called for a recession.
Goldman Sachs economists put a 35% chance of a U.S. recession over the next 24 months, and said stock market moves reflect worries about a slowdown, according to a research note.
Chinese exports slowed in dollar terms by 10.8 percentage points in April to just 3.9%, slightly more than expected but still the weakest since June 2020, suggesting continued disruption to global supply chains, according to a research note from Daiwa Capital.
West Texas Intermediate crude oil futures plunged $5.65 to $104.12 a barrel.