China also reported concerning economic data, suggesting that the recovery in the world’s second largest economy is progressing slowly.
In China, meanwhile, signs of another wave of the virus could compound an already sluggish economic recovery.
Industrial production, investment activity and retail sales improved somewhat from prior months, according to data released by China’s National Bureau of Statistics on Monday. Still, the three readings all fell below forecasts from analysts polled by Refinitiv.
“Ultimately it’s consumer’s willingness to leave their apartments amid persistent social distancing — either mandated by governments or by consumer behavior — [that] will dictate the speed of the recovery,” wrote Stephen Innes, chief global markets strategist at AxiCorp, in a research note. “But China’s consumer-led recovery is not moving forward quickly by any stretch of the imagination.”
Even so, some economists pointed to positive signs. Activity in the country’s services sector expanded for the first time this year, according to China’s National Services Industry Manufacturing Index. The index measures the change in output of the services sector each month.
“Overall economic output returned above 2019 levels in May for the first time since the Covid-19 outbreak,” Martin Rasmussen, China economist for Capital Economics, wrote in a research report. “We had previously thought that China’s economy wouldn’t return to positive year-on-year growth until [the third quarter]. But today’s data suggest that this milestone may be reached this quarter.”
Oil also moved lower. US oil futures tumbled 4.1%, to trade at $34.76 per barrel. Brent, the global oil benchmark, lost 3.4% to hit $37.49 per barrel. Brent and US oil prices both plunged more than 8% last week amid concerns of a resurgence of the pandemic.
— Matt Egan and Anneken Tappe contributed to this report.