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US Stocks Slump As Growth, Inflation Concerns Pound Big Tech; Oil Surges On OPEC Output Plans

Mounting growth concerns, as well as stubbornly high inflation, has markets on the back foot Monday ahead of this week's crucial September jobs report.

U.S. stocks slumped lower Monday, with big tech stocks leading the decline, as investors remained cautious heading in to the start of the week amid a series of headwinds to global growth that could test the Federal Reserve's policy stance in the months ahead.

China's regulatory crackdown, the ongoing crisis linked to indebted property developer Evergrande and a rolling power crunch, which has lead to a spike in energy costs around the world, are both testing investors' appetite for risk while boosting inflation forecasts heading into the Fed's November policy meeting.

Surging Inflation Is a U.S. Phenomenon, Not a Global One

Those pressures, alongside myriad warnings from U.S. companies that supply chain disruptions, elevated shipping costs and notably higher wages will eat into near-term profit margins, are taking the steam out of major markets around the world.  In the meantime, the Fed's preferred inflation gauge, the core PCE Price Index, surged 3.6% in August, the highest in three decades.   

European stocks, in fact, are trading 5% south of their August record highs, extending declines Monday from their worst week since February, while stocks in Asia are struggling to find momentum amid the week-long Golden holiday closures in China.

On Wall Street, the Dow Jones Industrial Average slumped 488 points by late-morning trading while the broader S&P 500 was marked 77 points lower. The Nasdaq Composite fell 370 points even as benchmark 10-year note yields fell below the 1.5% mark as a slump in Facebook  (FB) - Get Facebook, Inc. Class A Report clipped the tech-focused index's performance.

Apple  (AAPL) - Get Apple Inc. (AAPL) Report was marked 2.75% lower at $138.71 while Amazon  (AMZN) - Get Amazon.com, Inc. Report fell 3.05% to erase all of its gains for the year. 

Merck  (MRK) - Get Merck & Co., Inc. (MRK) Report shares, which ignited a solid Friday rally after it published promising data from its late-stage COVID treatment trial, extended its own gains Monday, rising 2.5% to $84.20 each, on the back of a series of price target upgrades linked to an estimated $10 billion revenue boost from the antiviral drug. 

General Motors  (GM) - Get General Motors Company (GM) Report shares surged 2.9% after activist investor Engine No 1, the hedge fund that successfully pushed for board changes at Exxon, said its built a stake in the biggest U.S. carmaker.

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Tesla  (TSLA) - Get Tesla Inc Report shares were also active, rising 1.8% to $788.78 each after the clean-energy carmaker posted record third quarter deliveries of 241,300 vehicles over the weekend.

Facebook fell 4.4% to $331.50 each following an interview on CBS's '60 Minutes' last night with whistleblower Frances Haugen

Oil prices surged higher again Monday, taking Brent crude back towards the $82 per barrel mark, ahead of today's meeting of OPEC ministers in Vienna where the cartel agreed a rollover of its 400,000 barrels per day production boost.

WTI futures for November delivery traded $2.14 higher on the session at $78.02 per barrel while Brent contracts December, the global pricing benchmark, were $2.45 higher at $81.72 per barrel.

Commodities Continue on a Supercycle Trajectory … For Now

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, eased 0.25% from its 2021 highs to trade at 93.789.

More Market Recaps For the Week of 10/4:

10/5 - Facebook Paces Tech Rebound, Renewed Oil Rally Boosts Dow Futures

10/6 - US Steel Stock Slumps On Goldman Downgrade, Price Correction Risk; Cleveland-Cliffs Gets Boost

10/7 - Dow, S&P Surge As Schumer Confirms Debt Ceiling Deal; Jobless Claims Fall to 326,000

10/8 - Stocks Edge Higher Amid Jobs Report Shock, Debt Ceiling Relief; Oil Hits $80