Stock Market Today: Futures Slip; Chinese Stocks Sink

China’s economy is in a funk.

That appears to be the verdict of stock investors, who sent the CSI 300 Index down 1.9% to its lowest level in almost five years. Hong Kong’s Hang Seng index also skidded.

Adding to the gloom: after Chinese markets closed, Moody’s Investors Service cut its outlook on the country’s credit rating to negative. The ratings company said financial lifelines extended by the government to distressed regions and companies are harming the economy.

China’s lackluster growth since the end of pandemic lockdowns has weighed on the stock market: The CSI 300 has fallen about 12% this year. U.S. investors should pay attention, too. As of July, 7.6% of the S&P 500’s revenue came from China, per FactSet, a share that rose to 27% for semiconductor companies.

Futures pointed to minor losses for U.S. stock indexes. Contracts for the S&P 500, Dow industrials and Nasdaq-100 slipped. Monday saw modest selloffs.

Government bonds rose in price. That pushed down yields. The yield on 10-year Treasury notes had settled at 4.286% Monday.

Oil prices rose. Trading at about $79 a barrel, benchmark Brent crude was on track to snap a three-day losing streak.

Up ahead, investors will parse monthly gauges of U.S. services from ISM and S&P Global, and the JOLTS report on job openings.

The Atlanta Fed’s real-time forecast for GDP growth this quarter stands at 1.2%, which would be the slowest pace since the second quarter of 2022, notes Deutsche Bank strategist Jim Reid.