- US futures took a tumble Monday as investors prepared for inflation data for June due later this week.
- In energy, Russia cut off natural gas supply, rattling markets over the threat of recession.
- Asian markets also kicked off the week on a weak note over COVID-19 flare-ups in the region.
US futures dropped on Monday as investors braced for key inflation data due later this week, while oil prices fell after Russia cut off natural gas supply via a major pipeline, feeding fears that recession may hit Europe.
Futures across the board fell, with the S&P 500, Nasdaq and Dow Jones down 0.65%, 0.80% and 0.58% respectively.
In the week ahead, investors' eyes will be on US Consumer Price Index numbers for June, with economists predicting another pick up in price growth despite the Federal Reserve raising rates quickly.
"Our economics team's view is that headline inflation will show little sign of abating as prices of gasoline, food and airline fares have continued to rise," analysts at ING said.
Economists expect consumer prices to have risen by 8.8% in June, following May's 8.6% increase.
Meanwhile, energy markets made some noise as Russia cut off natural gas supply to parts of Europe via the Nord Stream 1 pipeline to conduct maintenance for 10 days. The pipeline has been operating at 40% capacity for several weeks, but concern is mounting that the shutdown could be permanent, which would hit Europe's economy hard.
With fears over recession brewing, oil prices slid, with WTI crude dropping 2.56% to trade at $102.07 per barrel while Brent crude was down 2.35%, standing at $104.50. At the same time, natural-gas futures tumbled 4.35% to trade at 175 euros ($177) per megawatt-hour.
The dollar index jumped 0.48% to trade at 107.55 as recession fears and Fed tightening lifted the safe-haven currency.
Elsewhere in Europe, stocks declined on the mounting energy concerns. Frankfurt's DAX and Paris' CAC fell 1.06% and 1.30% respectively. The STOXX 600 dropped 0.85%.
"The progress of repair work will be watched closely and any indication that delays are looming could see a fresh scurry upwards in European gas prices," said Susannah Streeter, a market analyst at Hargreaves Lansdown.
In Asia, news of fresh COVID-19 cases largely dampened stock performance, with Hong Kong's Hang Seng shedding 2.77% and the Shanghai Composite dropping 1.27%, while Tokyo's Nikkei 225 added 1.11%. With China re-imposing its strict lockdown rules in six cities, concerns over supply-chain pressures and weakening demand return to investors' minds.