Stocks sank to their lowest level of 2022 on Monday, extending a five-week rout as investors weighed the prospect of interest rate hikes Y China lockdowns due to COVID-19.

The Dow fell 553 points, or 1.7%, as of 11:20 a.m. Eastern time. The broad-based S&P 500 fell 2.5% to 4,018, while the tech-heavy Nasdaq lost 3.4%.

It’s the fifth straight week of losses for the S&P 500, its longest losing streak since 2011, according to data provider FactSet.

“The overwhelming focus remains on inflation, rising interest rates and the war in Ukraine,” Brian Price, head of investment management at Commonwealth Financial Network, said in a note. “The combined factors of tight supply chains as a result of China’s zero covid policy and rising oil and food prices due to the war in Ukraine are causing inflation fears that are prompting a flight from risky assets. ”.

A turbulent week on Wall Street ended Friday with more lossesas investors balanced a strong US jobs report against concerns that the Federal Reserve could cause a recession in its campaign to stop inflation and the ongoing war in Ukraine.

The Fed hopes to raise rates and slow the economy enough to stifle the highest inflation in four decades, but it risks stifling growth if it goes too far or too fast.

China reported that its exports rose 3.7% from a year earlier in April to $273.6 billion, a sharp drop from March’s 15.7% growth, as global demand weakened. That increased pressure on the world’s second-largest economy after Shanghai and other industrial cities were locked down to combat virus outbreaks. Imports increased 0.7% in April to $222.5 billion, in line with less than 1% growth in the previous month.

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Businesses and investors fear that the ruling Communist Party’s “zero-COVID” strategy, which has temporarily closed most businesses in Shanghai and other industrial hubs, is disrupting global trade and activity in the auto, electronics and hardware industries. another type.

But the slowdown in the world economy is also taking its toll.

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“Part of the blame lies with the COVID-19 outbreak in China, which has caused labor shortages and bottlenecks in the logistics sector. But the extent of these outages should not be exaggerated,” Julian Evans-Pritchard said in a comment. “Instead, the drop in exports seems to mainly reflect weaker demand.”

In addition to concerns about inflation and coronavirus restrictions, the war in ukraine remains one of the main causes of uncertainty. More than 60 people are feared dead after a Russian bomb ripped through a school used as a shelter, Ukrainian officials said. Moscow forces intensified their attack on the defenders inside the Mariupol steel plant in an apparent race to capture the city before Russian Victory Day holiday Monday.

“Russia’s Victory Day today will also bring geopolitical risks back into the spotlight. President Putin is likely to reiterate his rationale for the Ukraine war, but markets may watch for any further efforts to ramp up trading.” military to secure the war. said Yeap Jun Rong, market strategist at IG in Singapore.

Even the energy sector, a star performer in recent weeks, is under pressure on Monday. Benchmark US crude fell $2.88 to $106.89 a barrel in electronic trading on the New York Mercantile Exchange, but is still up more than 40% this year. Brent crude, the basis for pricing oil for international trade, fell $2.74 to $109.65 a barrel.

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