Asian and European shares fell Monday, extending global stock losses after Wall Street's big sell off on rising investor anxiety over rising bond yields and disappointing quarterly earnings.
On Friday, U.S. stocks plunged amid inflation fears and following disappointing earnings from companies including Alphabet and ExxonMobil. U.S. stocks ended the week with their worst weekly performance in two years.
Investors are concerned about rising inflation, which could prompt the Federal Reserve to boost interest rates. Wages rose at their fastest rate in eight years, which could indicate a tighter labor market and lead to higher inflation. Average hourly earnings, which had been rising at a modest 2.5 percent in the recovery, increased by 2.9 percent from the year before, the Labor Department said on Friday.
Futures for both the Dow Jones Industrial Average and the S&P 500 index were down before the markets opened on Monday.
KEEPING SCORE: European stock indexes fell in early trading. Britain's FTSE 100 lost 1.2 percent to 7,354.38 and France's CAC 40 slid 1.0 percent to 5,310.59. Germany's DAX shed 0.8 percent to 12,677.69. Wall Street was poised to open lower. Dow futures were down 0.5 percent to 25,302.00 and broader S&P 500 futures retreated 0.3 percent to 2,749.00.
SELL OFF: Market jitters spread after the U.S. stock market had its worst session in two years on Friday, fueled by worries about inflation and rising Treasury yields. The strong start to 2018 after the record-setting performances of 2017 has raised concerns markets were overdue for a correction. A U.S. report showing job growth above expectations provided the catalyst for the sell-off, stoking speculation the Federal Reserve will need to raise its key interest rate faster than expected to counter inflation. Higher bond yields make it more expensive for companies to borrow and make bonds more attractive to investors than stocks.
MARKET INSIGHT: "The trigger point was the U.S. and the interest rate fears," said Jackson Wong, an associate director at Huarong International Securities. He said many of his firm's clients were taking the sell off as a chance to load up on shares like Chinese internet company Tencent. "Absolutely, it's just a correction. No one is talking about the end of the bull market."
ASIA'S DAY: Japan's benchmark Nikkei 225 tumbled 2.6 percent to 22,682.08 and South Korea's Kospi shed 1.3 percent to 2,491.75. Hong Kong's Hang Seng index sank 1.1 percent to 32,245.22 and Australia's S&P/ASX 200 lost 1.6 percent to 6,026.20. Benchmarks in Taiwan and Southeast Asia also lost ground. Only mainland Chinese shares showed signs of life, with the Shanghai Composite reversing early losses to climb 0.7 percent to 3,487.50.
ENERGY: Oil futures extended losses. Benchmark U.S. crude slid 64 cents to $64.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 35 cents to settle at $65.45 a barrel on Friday. Brent crude, used to price international oils, fell 56 cents to $67.02 a barrel in London.
CURRENCIES: The dollar weakened to 109.83 yen from 110.14 yen in late trading Friday. The euro rose to $1.2460 from $1.2458.