Stocks struggled Monday amid a deepening rout in Chinese technology shares, while Treasuries fell as traders weighed inflation risks from commodity-supply disruptions and braced for tight US monetary policy.
MSCI Inc.’s Asia-Pacific index fell for a second session, sapped by an 8% plunge in a gauge of Chinese tech firms. A Covid lockdown in Shenzhen, a key tech sector hub, added to concerns about geopolitical and regulatory risks.
A drop in the yen bolstered export-reliant Japan’s bourse. S&P 500 and European futures made modest gains but those for the Nasdaq 100 wavered. Investors were parsing efforts at diplomacy as Russia continues its invasion of Ukraine, as well as comments from a US official that Russia asked China for military equipment.
Treasuries extended a rout, taking the five-year US yield above 2% for the first time since May 2019. The Fed on Wednesday is expected to begin a cycle of rate increases to tame inflation, starting with a 25 basis-points move.
Price pressures were already high before the war in Ukraine, and the isolation of resource-rich Russia, stocked commodity costs.
