U.S. stock futures are deeply in the red to start the week with the benchmark Dow Jones Industrial Average down more than 500 points in pre-market trading Monday (September 20).
Dow Jones futures lost 557 points, or 1.6%, while S&P 500 index futures fell 1.4% and the NASDAQ 100 futures declined 1.2%.
Reasons for the selloff include investor fears that a contagion sweeping financial markets from the troubled China property market, worries that the U.S. central bank will signal it’s ready to start pulling away monetary stimulus amid surging inflation, and rising COVID-19 cases around the world as colder weather approaches.
September typically has the worst track record of any month for stock performance, averaging a 0.4% decline. And history shows the selling tends to pick up in the second half of the month.
Stocks linked to global growth were down the most in premarket trading. Ford (NYSE:F) and Carrier Global l(NYSE:CARR) lost more than 3%. General Motors (NYSE:GM) and Boeing (NYSE:BA) fell about 2%. Nucor Steel (NYSE:NUE) shed 2.8%.
Stocks tied to the energy sector tumbled as WTI crude oil prices fell 2% on concerns about the global economy. Occidental Petroleum (NYSE:OXY), Hess (NYSE:HES) and Devon Energy (NYSE:DVN) were among the biggest losers in U.S. premarket trading Monday.
Bond prices gained as investors seek safety. The 10-year treasury yield was at 1.329% before markets opened.
Big bank stocks are also taking a hit as the falling rates may crimp their profits. Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) were each down more than 2% in premarket trading.
Stocks have struggled so far in September in line with historical trends. For the month, the Dow Jones is off 2.2%. The S&P 500 is lower by 2% and the NASDAQ Composite is lower by 1.4%. The S&P 500 saw its biggest trading volume last Friday (September 17) since July 19, more than doubling its 30-day average trading volume.
