North American stock markets opened lower today, extending losses from last week after the benchmark indexes had their worst weekly decline since 2016.
The Dow Jones Industrial Average lost 227 points and was down nearly one per cent to 25,293.52 points Monday morning.
On Friday, it lost 666 points, its biggest daily decline since during the global financial crisis in December 2008.
The S&P 500 lost nearly one per cent to 2,736.08, while the tech-heavy Nasdaq Composite was down 0.8 per cent to 7,184.86. Both indexes had lost about two per cent on Friday.
Rising bond yields continued to weigh on the shares as investors worried that signs of rising inflation could make the Federal Reserve raise interest rates faster than anticipated.
As interest rates rise, the value of existing bonds falls and borrowing to invest becomes more expensive.
Robert Kavcic of BMO Capital Markets said in his morning note Monday that despite the sell-off in equities, the rise in treasury yields has not relented.
“Surging bond yields and the realization that monetary tightening is now a real and more significant factor,” he said.
“This just serves to reinforce our expectation that a March rate hike is coming, and that the three-per year pace that we have in our forecast right now is probably the starting point.”
In Toronto, the S&P/TSX Composite was down 0.6 per cent to 15,520.08 points in the morning.
The index had lost 255 points, or 1.6 per cent, on Friday, marking its worst decline in nearly five months. It had also lost four per cent for the week, marking its worst weekly decline since January 2016.
Shares of Aurora Cannabis were down 0.8 per cent despite announcing that it would buy 20 per cent stake in an Alberta liquor store chain.
Rest of the World
The majority of Asia’s major markets closed down on Monday as Wall Street’s sell-off on Friday raised concerns about an overdue correction in equities.
The region’s biggest market, Japan’s benchmark Nikkei 225 tumbled 2.6 per cent, while Hong Kong’s Hang Seng index lost 1.1 per cent.
The lone bright spot was Mainland China’s Shanghai Composite, which reversed losses to close up 0.7 per cent.
In Europe, the benchmark Stoxx 600 fell 1.5 per cent — marking it’s sixth consecutive day of losses totalling almost five per cent.
That is the biggest decline for the index since the United Kingdom voted to leave the European Union in June 2016.