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Global declines, US markets point to losses

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Futures for the Dow industrials tumbled 0.7% while the same for the S&P 500 fell 0.8%, as global losses in the markets decline drastically. The news that Emmanuel Macron won the run-off French presidential election over the weekend reassured markets that France won’t abruptly shift course. As reported by the AP:

France’s CAC 40 dropped 2% in midday trading, Germany’s DAX lost 1.3% and Britain’s FTSE 100 shed 2%

NEW YORK (AP) — Wall Street pointed toward a lower open Monday after European and Asian markets fell sharply as worries over interest rate hikes dominated an array of investor concerns.

FILE – The New York Stock Exchange operates during normal business hours in the Financial District, Wednesday, Oct. 13, 2021, in the Manhattan borough of New York. Stocks are opening lower on Wall Street, Friday, April 22, 2022, capping a bumpy week as the Federal Reserve promises to be more aggressive about fighting inflation. (AP Photo/John Minchillo, File)

Shares in Twitter jumped almost 5% in global premarket after multiple media outlets reported that the company’s board and Tesla CEO Elon Musk negotiated into the early hours of Monday over his bid to buy the social media platform. Musk said last week that he had lined up $46.5 billion in financing to buy Twitter, putting pressure on the company’s board to negotiate a deal.

The Shanghai Composite index sank 5.1% and Hong Kong fell 3.7% as China reinforced its stringent pandemic policies while case numbers rose.

The news that Emmanuel Macron won the run-off French presidential election over the weekend, clinching a second term as was widely expected, reassured global markets that France won’t abruptly shift course in the midst of the war in Ukraine.

People wearing face masks walk past a bank’s electronic board showing the Hong Kong share index in Hong Kong, Monday, April 25, 2022. Asian shares declined Monday after U.S. stocks ended last week on a tumble as global markets’ expectations for higher interest rates continued to set the tone. (AP Photo/Kin Cheung)

But the significant show by contender Marine Le Pen, a populist and nationalist, served as a reminder of how fragile that situation, and global markets might be, analysts said. Le Pen pledged to dilute French ties with the EU, NATO, and Germany, and spoke out against EU sanctions on Russian energy supplies.

In Asian trading, Japan’s benchmark Nikkei 225 lost 1.9% to finish at 26,590.78. South Korea’s Kospi slipped 1.8% to 2,657.13. Hong Kong’s Hang Seng dropped 770 points to 19,869.34, while the Shanghai Composite shed 158 points to 2,928.51, dipping below 3,000 for the first time since July 2020.

Hong Kong markets-traded shares in Internet company Baidu slumped 7%, while PetroChina lost 4% on falling oil prices.

FILE – Elon Musk, Tesla CEO, attends the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany, March 22, 2022. The intrigue surrounding Musk’s Twitter investment took a new twist Tuesday, April 12, 2022, with the filing of a lawsuit alleging the colorful billionaire illegally delayed disclosing his big stake in the social media company so he could buy more shares at lower prices. (Patrick Pleul/Pool Photo via AP, File)

“Coming after the heavy sell-off in Wall Street to end last week, overall risk appetite in the region may come under pressure as well,” said Yeap Jun Rong, market strategist at IG in Singapore.

Rising COVID-19 cases in China are setting off worries about more pandemic lockdowns that would crimp economic recoveries in the region. Beijing imposed lockdowns in several districts after case numbers rose.

Investors are also watching earnings reports and forecasts from companies, some of which have been disappointing — such as Netflix and Verizon — and contributed to Wall Street’s decline last week.

A woman wearing a face mask walks past a bank’s electronic board showing the Hong Kong share index in Hong Kong, Monday, April 25, 2022. Asian shares declined Monday after U.S. stocks ended last week on a tumble as global markets’ expectations for higher interest rates continued to set the tone. (AP Photo/Kin Cheung)

What the U.S. Federal Reserve might do is high on investors’ minds. The chair of the Federal Reserve has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting in two weeks. The Fed has already raised its key overnight rate once, the first such increase since 2018.

Markets around the world are feeling similar pressure on rates and inflation, particularly in Europe as the war in Ukraine pushes up oil, gas and food costs.

In energy trading, benchmark U.S. crude lost $4.92 to $97.15 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell $4.86 to $101.29 a barrel.

In currency trading, the U.S. dollar edged down to 128.24 Japanese yen from 128.59 yen. The euro cost $1.0751, down from $1.0803.

Source AP

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