(Bloomberg) — U.S. stock-index futures slid as investor sentiment cooled amid disappointing data and political tensions between the U.S. and China.
Contracts on the S&P 500 Index were down 0.9% as of 2:45 p.m. in Tokyo. Futures fell 0.9% on the Nasdaq 100 Index and 1% on the Dow Jones Industrial Average. Oil snapped a three-day gain as optimism over a nascent recovery in demand was replaced by worries about a supply glut.
President Donald Trump promised a “conclusive” report from the U.S. government on the Chinese origins of the coronavirus outbreak, adding that he has little doubt that Beijing misled the world about the scale and risk. Trump said tariffs would be “the ultimate punishment.” Global confirmed virus cases have surpassed 3.5 million, with deaths topping 247,000.
Asian stocks also fell amid the risk-off mood on Monday. Purchasing managers indexes across Southeast Asia slumped further below 50, the dividing line between contraction and expansion, to post their weakest readings since the series began, according to data released by IHS Markit on Monday.
“More anti-China rhetoric from Washington D.C. over the weekend and this morning, along with nightmarish manufacturing PMIs across Asia, has seen equities fall deeply into the red,” Jeffrey Halley, a senior market analyst at Oanda Asia Pacific, wrote in a note to clients. “We expect equities to remain heavily under pressure even if the Covid-19 data across the globe shows signs of improvements today.”
The S&P 500 Index fell 2.8% to close at 2,830.71 Friday after sobering comments from Amazon.com Inc. and Apple Inc. about the pandemic’s impact. Exxon Mobil Corp. slumped after posting its first quarterly loss in at least 32 years. Equities also retreated in the U.K. and Japan, with many other global markets closed for May Day.
“We are starting to see signs that the market is stalling just under major resistance at the 3,000 level,” J.C. O’Hara, chief market technician at MKM Partners LLC, wrote in a report. With funds boosting equity exposure in April, “the concern now is that much of the shorter term dry powder was just used, which makes further upside less likely in the days ahead.”
The U.S. benchmark gauge advanced nearly 13% in April, marking the best month since 1987. Markets are off to a shaky start in May as corporate earnings have helped renew investor concern. Companies due to report this week include Walt Disney Co., General Motors Co. and Bristol-Myers Squibb Co.
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