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US stock futures drop and oil falls to 2022 lows as Chinese protests against zero-COVID curbs spook markets

Protesters shout slogans during a protest against Chinas strict zero COVID measures on November 28, 2022 in Beijing, China. Protesters took to the streets in multiple Chinese cities after a deadly apartment fire in Xinjiang province sparked a national outcry as many blamed COVID restrictions for the deaths.
US stocks and oil both fell Monday as anti-lockdown protests in China rattled markets.Kevin Frayer/Getty Images
  • US stock futures fell in premarket trading Monday as Chinese protests weighed on market sentiment.

  • Crude oil prices fell to their lowest levels this year on worries about a hit to Chinese demand.

  • Unrest erupted in Beijing, Shanghai and other major cities in protest against zero-Covid restrictions.

US stock futures fell and crude oil prices hit their lowest levels this year Monday, as public protests in China against President Xi Jinping's zero-Covid policies unsettled investors.

Futures linked to the S&P 500 benchmark US stock index lost 0.71% in premarket trading, while Nasdaq futures were down 0.81% and Dow Jones Industrial Average futures shed 174 points to drop 0.51%.

Meanwhile, worries about weaker demand for fuel in China sent oil prices lower, with the global benchmark Brent crude declining just over 3% to $81.04 a barrel and the US benchmark WTI crude down about 3% to $73.95 a barrel.

Protesters in major cities including Beijing and Shanghai are campaigning against China's strict lockdowns, which the government has continued to implement in a bid to contain the spread of coronavirus cases, which are hitting daily record highs.

Demonstrations broke out after social media posts blamed the restrictions for preventing firefighters from tackling a blaze that killed 10 people.

The unrest and its potential to hit the world's second-largest economy hit market sentiment. It has also shifted investors' focus away from the monthly US jobs report due Friday, which could offer up the most hopeful sign yet that the Federal Reserve will ease up its tightening campaign in December, analysts said.

"The recent narrative has been that markets have room to celebrate the downward shift in Fed tightening expectations and hopes that an eventual opening up of China's economy will help boost global growth," Saxo Bank strategists said.

"The widespread protests at the weekend have changed the plot, driving new uncertainty on how things will develop and possibly outweighing a considerable portion of the implications of the next important data macro data points out of the US, especially the Friday November jobs report," they added.

Asian stocks also fell Monday. Hong Kong's Hang Seng index led the selloff by dropping 1.57%, while the Shanghai Composite slipped 0.75%. Tokyo's Nikkei 225 closed 0.42% lower.

Here's what else is happening in markets this morning:

  • European stocks traded lower, with the flagship Stoxx 600 index down 0.83%. Paris's CAC 40 slid 0.85%, Frankfurt's DAX 40 dropped 0.83%, and London's FTSE 100 fell 0.67%.

  • Bond prices edged higher, with US 2-year yields down 5.8 basis points to 4.451% and US 10-year yields falling 4.9 basis points to 3.651% at last check.

  • The US Dollar Index, which tracks the greenback against a basket of six other leading currencies, fell 0.36% to 105.58.

  • Cryptocurrencies continued to trade close to their 2022 lows, with bitcoin down 2.14% to $16,215 and ethereum dropping 3.44% to $1,174.

Read the original article on Business Insider