According to Reuters, major indexes on Wall Street closed Monday, November 21, mostly down as investors feared that China could reintroduce strict COVID-controlled measures amid surging new infections.
The Dow Jones Industrial Average dropped 45.41 points or 0.13%, the S&P 500 fell 15.4 points or 0.39%, while the Nasdaq Composite lost 121.55 points or 1.09% for the day.
Shares of American casino operators with businesses in China, including Wynn, Las Vegas Sands, MGM, and Melco, all plunged at least 2%.
Beijing officials announced Monday that the city would close businesses and schools in hard-hit areas and enforce strict measures for entering the capital city as positive cases surge.
Bloomberg reported that around 27,000 new cases were recorded on Monday, about the same as Shanghai’s record high of nearly 29,000 cases in April. Guangzhou’s manufacturing hub is the new wave’s spotlight, with about 8,500 infections.
Carol Schleif, deputy chief investment officer at BMO Family Office, told Reuters, “There is this fear that China might reinstitute some of the COVID restrictions that they’ve just purportedly started to lift.”
Meanwhile, Asian shares were down over the concerns that the latest outbreaks could lead to further restrictions, causing supply chain disruptions.
According to Reuters, the Asia-Pacific index excluding Japan fell 0.25%, while China’s benchmark dropped 0.13%, and Hong Kong’s index lost 1.31%.
Redmond Wong, market strategist for Greater China at Saxo Markets in Hong Kong, said, “China’s Covid situation is really in the front row for Asia trading.”
Oil prices decreased, and the U.S. dollar gained because investors turned to the safe currency as they feared the global economic outlook from China’s COVID restrictions.