NEW YORK, United States — Major US stock indices
tumbled at the start of trading Monday as traders braced for the fallout from
the expected collapse of debt-plagued Chinese property giant Evergrande.
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About 15 minutes into trading, benchmark Dow Jones
Industrial Average was down 1.1 percent to 34,213.97 at the open.
The broad-based S&P 500 lost 1.2 percent to 4,382.12 and
the tech-rich Nasdaq Composite Index fell 1.3 percent to 14,841.81.
Investors also have eyes on the two-day US Federal Reserve
meeting beginning Tuesday where the central bank could make changes to its
stimulus policies, along with continued COVID-19 outbreaks and still-high
inflation numbers.
However, those concerns are familiar, but markets are truly
worried about the possibility that a collapse of
Evergrande, one of China's
biggest
developers that is awash in debt of more than $300 billion, could
reverberate across markets worldwide.
Patrick J. O'Hare of Briefing.com said that after months of
generally positive sentiment, traders have convinced themselves a pullback is
imminent, no matter what happens.
"It's a market also contending with the notion that it
is overdue for a correction, which is an idea it has been battling with — and
probably would still be battling with today irrespective of the other headline
catalysts," he wrote.
Investors also are watching developments in Washington,
where Congress needs to raise the US debt ceiling to avoid a catastrophic
default in the coming weeks, something the Republican opposition says it will
not support.
Meanwhile, President Joe Biden's spending bills on
infrastructure and social services are the subject of frenzied negotiations
among the Democratic leadership, and could include big corporate tax changes.
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