Futures slide as China worries sour global mood

(Reuters) – U.S. stock index futures fell on Monday, as worries about China’s economy dented sentiment globally after sharp gains on Wall Street last week driven by better-than-expected earnings and hopes of a less aggressive Federal Reserve.

U.S.-listed shares of Chinese companies such as Alibaba (NYSE:) Group Holding Ltd and Baidu Inc (NASDAQ:) led the losses in early premarket trading, down 12.5% and 11.7%, respectively, as President Xi Jinping’s new leadership team heightened fears that growth will be sacrificed for ideology-driven policies.

Meanwhile, delayed data on gross domestic product showed the Chinese economy grew a better-than-expected 3.9% in the third quarter, but retail sales disappointed with a meager rise of 2.5%.

Tesla (NASDAQ:) fell 3.5% after the electric-car maker cut starter prices for its Model 3 and Model Y cars by as much as 9% in China, reversing a trend of increases across the industry amid signs of softening demand in the world’s largest auto market.

Wall Street jumped on Friday after a report said the Fed will likely debate on a smaller interest rate hike in December, raising hopes the central bank may be poised to adopt a less aggressive policy stance.

All the three major indexes notched their biggest weekly percentage gains in four months last week, supported by better-than-feared third-quarter earnings so far.

Of the 99 companies in the that have reported quarterly earnings as of Friday, 74.7% beat analysts’ expectations, according to Refinitiv estimates. The long-term average is 66.2%.

Focus now shifts to reports this week from big tech and growth companies. Google-parent Alphabet (NASDAQ:) Inc will report on Tuesday, followed by Facebook-parent Meta Platforms Inc on Wednesday and Apple Inc (NASDAQ:) and Amazon.com Inc (NASDAQ:) on Thursday.

At 4:43 a.m. ET, were down 197 points, or 0.63%, were down 26.5 points, or 0.7%, and were down 95 points, or 0.84%.

Investors were waiting for S&P Global (NYSE:)’s flash survey on manufacturing and services sector activity in October for clues on the health of the U.S. economy amid rapidly rising interest rates.

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