By Yasin Ebrahim
Investing.com -- The S&P 500 slumped Monday, paced by a selloff in energy and tech as investors continued to abandon stocks amid concerns about an inflation-led slowdown in global growth.
Energy fell more than 7% pressured by a stronger dollar and fresh fears over weakening demand from China as Shanghai reportedly intensified Covid-19 lockdown measures.
The recent China lockdowns are expected to slow growth in the world’s second largest economy, adding to fears of a significant slowdown in the global economy at a time when central banks are on the road to tightening monetary policy to rein in inflation.
“The Covid-zero policy [in China] has throttled household spending and has not left the productive side of the economy unscathed,” Morgan Stanley said. “The risk of an extended contraction is plain to see,” it added.
Tech, meanwhile, struggled to find its footing as investors appear wary of buying the dip even as Treasury yields took a breather.
The selling in Microsoft took its valuation below $2 trillion for the first time since June 2021.
The earnings front didn’t offer much to help improve investor sentiment as Palantir Technologies (NYSE: PLTR ) plunged more than 18% after reporting quarterly results and guidance that fell short of analysts’ estimates.
Crypto-related stocks including Coinbase (NASDAQ: COIN ), Marathon Digital (NASDAQ: MARA ), and Riot Blockchain (NASDAQ: RIOT ) were down double digits after bitcoin fell to its lowest level since June.
A sign of the negative sentiment on Wall Street, consumer staples, a defensive corner of the market, was the only sector in the green.
"Consumer Staples defensive characteristics make this sector potentially attractive during market volatility and as the economy slows," Wells Fargo said.
In other news, Uber Technologies (NYSE: UBER ) fell more than 8% as the ride-hailing company reportedly plans to scale back hiring and cut its market marketing and incentives spending, CNBC reported, citing an email from chief executive Dara Khosrowshahi to staff on Sunday.
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