U.S. Stocks Settle Notably Lower On Inflation Worries

U.S. stocks ended sharply lower on Monday, after languishing in negative territory right through the day’s session.

High commodity prices, a surge in Treasury yields, worries about growth and rising inflation rendered the mood bearish.

Traders were also worried that the regulatory crackdowns and a collapse at Evergrande could hurt an already fragile Chinese economy and weigh on global growth.

Market participants were closely watching beleaguered developer China Evergrande, whose shares were suspended in Hong Kong ahead of an announcement about a major transaction.

Among the major averages, the Dow, which plunged to 33,821.58 a little before noon, ended with a loss of 323.54 points or 0.94 percent at 34,002.92. The S&P 500 settled with a loss of 56.58 points or 1.3 percent at 4,300.46, while the tech-laden Nasdaq closed with a loss of 311.21 points or 2.14 percent at 14,255.48, more than 70 points off the session’s low of 14,181.69.

A report released by the Commerce Department showed new orders for U.S. manufactured goods jumped by more than expected in the month of August, with factory orders surging up by 1.2 percent in the month, after climbing by an upwardly revised 0.7 percent in July.

Economists had expected factory orders to increase by 0.9 percent compared to the 0.4 percent rise originally reported for the previous month.

The report showed orders for durable goods shot up by 1.8 percent, while orders for non-durable goods rose by 0.6 percent. Meanwhile, the Commerce Department said shipments of manufactured goods inched up by 0.1 percent in August after jumping by 1.5 percent in July.

Facebook shares tumbled nearly 5 percent after a whisle-blower alleged that the company prioritizes profit over the wellbeing of its users.

Shares two other social media firms, Twitter and Snap also fell sharply.

Apple, Visa, Microsoft, Amazon, Alphabet, Cisco Systems, Goldman Sachs, Walt Disney, American Express, Boeing and Caterpillar lost 1 to 2.5 percent.

Merck shares moved up more than 2 percent, lifted by an announcement from the company that its coronavirus pill reduces the risk of death and hospitalization.

Energy stocks found support as oil prices rose sharply after the Organization of the Petroleum Exporting Countries, Russia and their allies decided to stick to their current crude output plan of hiking production by 400,000 barrels per day in November.

In overseas trading, Asian stocks ended mixed in thin holiday trading on Monday, as the fate of the Biden Administration’s flagship spending bills remained unclear and the Evergrande debt crisis continued to cast doubt over China’s economic growth.

European stocks ended weak on Monday with investors largely staying cautious, fretting over risk to growth from rising inflation and China Evergrande’s financial troubles.

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