Why Is the Stock Market Down Again Today? Dow Slides, Twitter Jumps, Oil Falls.

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The stock market was sliding Monday, as rising Covid-19 cases in China raised concerns about a global economic slowdown.

In afternoon trading, the

Dow Jones Industrial Average
declined 224 points, or 0.7%, following a 981-point slide in the benchmark on Friday. The

S&P 500
was down 0.9%, while the

Nasdaq Composite
was flat.

The stock market had already been spooked by rising Treasury bond yields and the potential for much higher interest rates as the Federal Reserve seeks to tame high inflation. On Monday, it decided to worry about the impact of rising Covid cases in China, too as Shanghai saw thousands of new cases on Sunday.

Economically-sensitive stocks were seeing the worst losses. The

Industrial Select Sector SPDR
Exchange-Traded Fund (XLI) fell 1.6%, while the

Materials Select Sector SPDR
ETF (XLB) fell 2.2%.

Growth concerns were also weighing on the price of oil, with WTI crude down more than 5% to just under $97 a barrel, and causing a general rush into safer assets. The price of the 10-year Treasury bond rose, with the yield falling to 2.79%, from 2.92% on Friday. 

Tech stocks, the profits of which are more reliant on long-term industry changes and less on strong economic growth, were holding up the best. The falling 10-year yield was also helping tech. Lower yields on long-dated bonds make future profits more valuable—and many fast-growing tech companies are valued on the basis that they’ll pump out a chunk of their profits many years in the future.

Outside of tech, stocks were down across the board. More than three-fourths of S&P 500 stocks were in the red, according to FactSet.

“Sentiment is ugly,” wrote NatAlliance’s Andrew Brenner. “We think the Fed is clearly not going to get a soft landing, and the choppiness is scary.” A “soft landing” means the Fed can raise interest rates to tame inflation without destroying economic demand, which is already facing challenges. 

Now, the hope is that strong corporate earnings can help arrest the market’s decline. Some 173 S&P 500 companies are scheduled to report this week, including

Microsoft (ticker: MSFT),

Amazon.com (AMZN),

Apple (AAPL),

Alphabet (GOOGL),

General Electric (GE),

PepsiCo (PEP) and

United Parcel Service (UPS). 

But so far, earnings season hasn’t done much for the stock market. That’s because macroeconomic concerns threaten to curb earnings growth past the current quarter, which means profits results aren’t necessarily the best representation of what earnings will look like in the coming quarters. 

“Despite strong results, the market’s response has been particularly muted,” wrote Jonathan Golub, chief U.S. equity strategist at Credit Suisse. “This is often the case when macro headlines hijack investor focus.” 

Overseas, the pan-European

Stoxx 600
fell 1.8%, and Tokyo’s

Nikkei 225
lost 1.9%.

Cryptocurrencies followed stocks lower. Higher interest rates are likely to dampen investor sentiment on assets that are viewed as riskier, like digital assets.

Bitcoin,
the largest cryptocurrency, fell 3% over the past 24 hours to around $38,500.

Here are five stocks on the move Monday:

Twitter (TWTR) rose 4%, after the social-media company met with Elon Musk over the weekend to discuss the

Tesla CEO’s $43 billion takeover bid.

Activision Blizzard (ATVI) stock dipped 1% after the company reported a profit of 64 cents a share, missing estimates of 71 cents a share, on sales of $1.77 billion, below expectations for $1.82 billion. 

Coca-Cola (KO) stock fell 0.1% after the company reported a profit of 64 cents a share, beating estimates of 58 cents a share, on sales of $10.5 billion, above expectations for $9.8 billion. 

Advanced Micro Devices (AMD) stock gained 1.4% after getting upgraded to Strong Buy from Outperform at Raymond James. 

Deere & Co. (DE) stock dropped 6.8% after getting downgraded to Neutral from Buy at Bank of America. 

Write to Jack Denton at jack.denton@dowjones.com and Jacob Sonenshine at jacob.sonenshine@barrons.com