Wall Street drops at open amid Evergrande turbulence

GuangZhou Evergrande Center
Guangzhou Evergrande Center (Photo: From Evergrande Wikipedia page)
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.اضافة اعلان

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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