U.S. stock indexes fall as coronavirus lockdown protests spread in China

A person with short hair and wearing a mask is seen from the side.
Stocks closed lower on Monday as the market reacted to weekend protests in China over its strict COVID-19 lockdowns.
(Ahn Young-joon / Associated Press)

A broad slide on Wall Street left stocks lower Monday as global financial markets reacted to protests in China calling for President Xi Jinping to step down amid growing anger over severe COVID-19 restrictions.

The Standard & Poor’s 500 index fell 1.5%, clawing back all of the benchmark index’s gains from last week. The Dow Jones industrial average finished 1.4% lower, while the Nasdaq composite slid 1.6%.

The world’s second-largest economy has been stifled by a “zero COVID” policy, which includes lockdowns that continually threaten the global supply chain at a time when recession fears hang over economies worldwide. The recent demonstrations there are the greatest show of public dissent against the ruling Communist Party in decades.


The unrest stoked worries on Wall Street that if Xi cracks down even further on dissidents or expands the lockdowns, it could slow the Chinese economy, which would hurt oil prices and global economic growth, said Sam Stovall, chief investment strategist at CFRA.

“A lot of people are worried about what the fallout will be, and basically are using that as an excuse to take some recent profits,” he said.

More than 90% of the stocks in the S&P 500 closed in the red, with technology companies the biggest weights on the broader market. Apple, which has seen iPhone production hit hard by lockdowns in China, fell 2.6%.

Banks and industrial stocks also were among the biggest drags on the market. JPMorgan fell 1.7% and Boeing slid 3.7%.

Several casino operators gained ground as the Chinese gambling haven of Macao tentatively renewed its licenses. Las Vegas Sands rose 1.1% and Wynn Resorts gained 4.4%.

The fallout from the collapse of crypto exchange FTX continued. Cryptocurrency lender BlockFi is filing for Chapter 11 bankruptcy protection. Cryptocurrency exchange Coinbase Global fell 4% and the price of bitcoin slipped 2.1%.

All told, the S&P 500 fell 62.18 points to 3,963.94. The Dow dropped 497.57 points to 33,849.46. The tech-heavy Nasdaq lost 176.86 points to close at 11,049.50.


Smaller-company stocks fell even more than the broader market. The Russell 2000 slid 38.23 points, or 2.1%, to 1,830.96.

Markets in Asia and Europe fell. The yield on the 10-year Treasury held steady at 3.69%.

Wall Street is coming off a holiday-shortened week that was relatively light on corporate news and economic data. Investors have a busier week ahead as they continue monitoring the hottest inflation in decades and its effect on consumers, businesses and monetary policy.

Anxiety remains high over the ability of the Federal Reserve to tame inflation by raising interest rates without going too far and causing a recession. The central bank’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March. It has warned that it may have to ultimately raise rates to previously unanticipated levels to rein in high prices on food, clothing and other items.

Fed Chair Jerome H. Powell will speak at the Brookings Institution about the outlook for the U.S. economy and the labor market Wednesday.

The Conference Board will release its consumer confidence index for November on Tuesday. That could shed more light on how consumers have been holding up amid high prices and how they plan on spending through the holiday shopping season and into 2023.

The government will release several reports about the labor market this week that could give Wall Street more insight into the economy. A report about job openings and labor turnover for October will be released Wednesday, followed by a weekly unemployment claims report Thursday. The closely watched monthly report on the job market will be released Friday.

Associated Press writers Elaine Kurtenbach and Matt Ott contributed to this report.