Stock futures in the United States fell on Monday as China made a series of actions indicating that tensions between the world’s two largest economies are likely to worsen.
The E-mini S&P 500 futures ES00 and the Nasdaq 100 futures both fell 0.2%. Dow industrials YM00 futures were down 175 points.
The drop began after a strong week for US benchmarks, with the S&P 500 SPX rising 2% to reach its 40th record closing of 2021, and the tech-heavy Nasdaq Composite COMP rising 2.8% ahead of earnings from Alphabet, Amazon, Apple, Facebook, and Microsoft.
The U.S. earnings calendar includes electric-vehicle maker Tesla TSLA , which reports after the close on Monday. Also, this week will see the latest Federal Reserve interest-rate decision and the gross domestic product report for the second quarter.
The Hang Seng HSI plunged more than 4% on Monday, following a crackdown on Tencent’s music licensing and the whole tutoring market.Tencent Music Entertainment’s (TME) stock fell 14% in premarket trading after China forced the business to stop exclusive relationships with music rights holders.
Education stocks on the Hong Kong Stock Exchange have plummeted after educational training institutes were barred from raising funds on the stock exchange and foreign capital was prohibited from investing. On Friday, the crackdown crushed Chinese education stocks listed in the United States.
The crackdown came as China blamed the U.S. for a stalemate in bilateral relations as high-level talks began in the Chinese city of Tianjin.