Stock Market Today: World Stocks Follow Wall Street's Retreat, Oil Prices Surge

FILE - The New York Stock Exchange is shown in New York's Financial District on Dec. 31, 2024. American flags flew at half-staff there following the death of former U.S. president Jimmy Carter. (AP Photo/Peter Morgan, File)

NEW YORK (AP) — Drops for Nvidia and other superstar stocks are dragging U.S. indexes lower and keeping Wall Street stuck in its weekslong rut. The S&P 500 fell 0.8% early Monday. The index is coming off its fourth losing week in the last five. The Dow Jones Industrial Average slipped 16 points, and the Nasdaq composite fell 1.4%. Chip companies, bitcoin-related stocks and other recent winners were helping lead the way lower as traders cull expectations for how much the Federal Reserve may cut interest rates. Markets are looking ahead to updates on inflation this week and earnings from big banks including JPMorgan Chase.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

U.S. markets are reeling again Monday following economic data last week that reflected a still-thriving economy and labor market, dampening hopes that the Federal Reserve will cut interest rates substantially this year.

Futures for the S&P 500 dropped 0.8% before the bell and futures for the Dow Jones Industrial Average were down 0.2%

Oil prices surged close to another 2% to a five-month high after President Joe Biden’s administration expanded sanctions against Russia’s critically important energy sector over its war in Ukraine. The Biden administration said the sanctions announced Friday were the most significant to date against Moscow’s oil and liquefied natural gas sectors, major drivers of Russia’s economy.

U.S. benchmark crude oil surged $1.50 to $78.07 per barrel, while Brent crude, the international standard, rose $1.24 to $81 per barrel.

Shares of U.S. Steel rose 4.3% after the Biden Administration pushed back to June the deadline it imposed for the Pittsburgh company to unwind its proposed acquisition by Japan's Nippon Steel. The extra time opened up by the deadline postponement was viewed by U.S. Steel — and investors — as an opportunity to for the companies to complete the acquisition. President-elect Donald Trump, who will be in office when the new deadline arrives, also opposes the deal.

Tesla shares tumbled 2.8% in premarket after reports that one of Europe's largest pension funds sold its entire stake in Elon Musk's electric car company. The reports claim that the pension fund was not on board with the massive pay package that Musk is seeking. A Delaware court in December rejected the pay package — once valued at $56 billion — for a second time. Tesla said it planned to appeal the court's decision.

Moderna slumped closed to 19% before the bell Monday after the company cut its outlook based on continued shrinking demand for its COVID-19 vaccine.

Shares of Howard Hughes Holdings climbed 9.4% to more than $78 after Bill Ackman's Pershing Squared made an offer to buy out shareholders of the real estate development company for $85 per share.

Elsewhere, in Europe at midday, Germany’s DAX declined 0.6% as did the CAC 40 in Paris. Britain’s FTSE 100 was down 0.5%.

Markets in Japan were closed for a holiday.

China reported its exports grew at a 10.7% annual pace in December, faster than expected, as factories rushed to fill orders to beat higher tariffs that U.S. President-elect Donald Trump has threatened to impose once he takes office.

Economists had forecast they would grow about 7%. Imports rose 1% year-on-year. Analysts had expected them to shrink about 1.5%.

The upbeat data failed to boost the region's stocks. Hong Kong’s Hang Seng dropped 1% to 18,874.14, while the Shanghai Composite lost 0.3% to 3,160.76.

“Adding to the skittish sentiment is the uncertainty over how Asian economies, especially China, will fare under the shadow of the incoming Trump administration’s ‘America First’ trade policies,” Stephen Innes of SPI Asset Management said in a commentary.

Australia’s S&P/ASX 200 dipped 1.2% to 8,191.90. South Korea’s Kospi shed 1% to 2,489.56.

The U.S. dollar fell to 156.99 Japanese yen from 157.82 yen. The euro dropped to $1.0205 from $1.0244.

On Friday, the S&P 500 tumbled 1.5%, ending its fourth losing week in the last five. The Dow Jones Industrial Average dropped 1.6% and the Nasdaq composite sank 1.6%.

Stocks took their cues from the bond market, where yields leaped to crank up the pressure after a report said U.S. employers added many more jobs to their payrolls last month than economists expected.

Such strength in hiring is of course good news for workers looking for jobs. But it could also keep upward pressure on inflation by keeping the overall economy humming. That in turn could dissuade the Federal Reserve from delivering the cuts to interest rates that Wall Street loves.

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