Here Is How China’s Chaotic COVID Status Impacts the Market

On Monday, U.S. market index futures fell as COVID-19 flare-ups in China increased worries about slowing GDP. In contrast, Disney shares rose as investors praised Bob Iger’s unexpected return as CEO.

Iger’s comeback less than a year after his retirement coincided with the entertainment company’s endeavor to increase investor trust and earnings at its streaming media subsidiary, and Walt Disney (NYSE:DIS) Co soared 8.1% higher in premarket trade. Chinese stocks with U.S. listings, like JD (NASDAQ:JD). COM and Alibaba (NYSE:BABA) Group saw declines of roughly 5% and 2%, respectively, as the COVID-19 cases’ most recent wave put China’s determination to uphold changes made to its zero-COVID policy to the test.

Will the Rates Jump Any Higher?

After some officials reiterated the central bank’s commitment to continue tightening monetary policy until inflation was under control, which partially caused the three major indexes to decline on Friday, attention is now focused on the minutes from the U.S. Federal Reserve’s November meeting, which will be released on Wednesday.

With a high in rates anticipated for June, traders are betting 19% that the Fed will increase its important benchmark rate by 75 basis points at its December policy meeting. The Dow e-minis, S&P 500 e-minis, and Nasdaq 100 e-minis were all down at 5:22 a.m. ET, or 0.27%, 0.55%, and 86.75 points, respectively.

On the other hand, on Monday, European markets fell as investors worried about the effects of the rising COVID-19 cases in China. The most economically vulnerable sectors to suffer losses were mining and industrials. The pan-European STOXX 600 index fell 0.1% on Monday after recording its sixth consecutive weekly increase on Friday. As COVID-19 instances increased and Beijing’s most populated district urged citizens to stay at home, investors worried about the economic effects of new COVID-19 regulations in China caused Asian equities to close significantly down on Monday.