Stocks slide to start Thanksgiving week as falling oil drags down energy names

Stocks fell Monday in a volatile session to start a short trading week due to the Thanksgiving holiday.

Fears that China may again ramp up Covid restrictions after reporting deaths from the virus weighed on markets, sending energy stocks and oil prices lower. Traders also looked for further signals from the Federal Reserve about future interest rate hikes.

The Dow Jones Industrial Average shed 82 points, or 0.24%. Losses for the 30-stock average were somewhat mitigated by a jump in Disney shares. The S&P 500 shed 0.53% and the Nasdaq Composite fell 1.18%.

“That puts a dent in the global economic recovery story that we were hoping would be ushered in with a reopen in China,” said Art Hogan, chief market strategist at B. Riley Financial.

Shares of Disney rose more than 7% after the company announced that former CEO Bob Iger would return to the helm of the entertainment giant, replacing Bob Chapek immediately. Iger’s return to Disney ends a brief and rocky tenure for Chapek, who took over the CEO role in February 2020.

The recent bear market rally is likely on hold due to a shorter trading week for the Thanksgiving holiday, which may see increased volatility and lower volumes as traders take time off. Earlier in the month, stocks rose with the October consumer price index reading and gained some steam with last week’s reading on wholesale prices.

Traders last week were hung up on messaging from Federal Reserve officials, who were less impressed with the figures and reassessed their optimism around the possibility of slowing inflation. The market will get more information about the central bank’s path ahead to digest when Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard speak Tuesday.

“With 375 basis points of Fed rate hikes so far, an inverted yield curve, spikes in inflation, and commodity prices still a part of the narrative, we can all but conclude that we are late in the economic cycle,” Liz Young, SoFi’s chief investment strategist, said in a note this weekend.

The New York Stock Exchange will be closed Thursday for Thanksgiving, and will have a shortened trading day on Friday. This week, traders will be digesting further speeches from Federal Reserve leaders as well as earnings reports from Best Buy, Nordstrom, Dick’s Sporting Goods and Dollar Tree.