Stocks Waver After Weak China Growth Data

The U.S. stock market has been on a bumpy ride for the last month and a half, dogged by concerns about inflation and slowing growth. Investors have been digesting the growing possibility that inflation could last longer than expected, due, in part, to worsening supply-chain bottlenecks and labor shortages. Signs of slowing economic growth have also added to concerns.

Data out Monday showed China’s economy grew 4.9% in the third quarter from a year prior, a slowdown from the second quarter’s 7.9% rate. Power shortages and supply-chain problems added to the impact of Beijing’s efforts to rein in its property and technology sectors. 

The slower growth data are “a reminder that China is expected to lose some of its momentum, but also how these global issues like the energy crisis and supply chain issues will filter through to global growth,” said

Edward Park,

chief investment officer at U.K. investment firm Brooks Macdonald. “There’s just a bit of rebasing of expectations for China and the rest of the world.” 

Major indexes in Asia closed slightly lower. China’s Shanghai Composite was down 0.1%, while the CSI 300 index of large stocks listed in either Shanghai or Shenzhen closed 1.2% lower. Hong Kong’s Hang Seng rose at the end of trading, to close up 0.3%. 

“We’re in a mid-cycle slowdown,” said David Chao, global market strategist for the Asia Pacific ex-Japan region at Invesco, adding that Chinese markets were in for continued uncertainty and volatility in the near term. Still, he added: “Keep in mind the government has many tools to propel the economy forward.”

Shares of Zillow Group declined 8.5% after Bloomberg reported that the company’s automated home-flipping business had stopped pursuing new home acquisitions temporarily.

A strong start to earnings season has underpinned hopes that companies can weather mounting challenges. On Monday, Albertsons added 2.3% after the supermarket company posted higher sales and raised its guidance for the full year.

State Street

shares rose 4.2% after the investment-management company posted higher quarterly revenue and earnings on the year, as fee-based and interest income both grew.

In the broader market Monday, the energy and consumer discretionary sectors posted the strongest performances of the S&P 500’s 11 groups.

Occidental Petroleum

was among the biggest winners in the benchmark index, gaining 5%.

Brent crude futures, the benchmark in global oil markets, ticked down 0.2% to $84.70 a barrel. Last week, Brent crude notched its eighth consecutive week of gains—its longest such streak since a 10-week period through April 30, 1999.

Fresh data released Monday by the Federal Reserve showed that U.S. industrial production—a measure of factory, mining and utility output—pulled back in September, falling 1.3% compared with the previous month. Economists surveyed by The Wall Street Journal had expected a 0.2% increase. Monday’s report cited supply-chain snarls and the lingering effects of Hurricane Ida as reasons for the decline.

Bitcoin, the world’s largest cryptocurrency by market value, gained 4.3% from its 5 p.m. ET level Sunday to trade at $62,011.68. The U.S.’s first bitcoin exchange-traded fund is expected to start trading Tuesday. 

In bond markets, the yield on the 10-year Treasury note ticked up to 1.593% Monday, from 1.574% Friday. Yields rise when prices fall. 

Overseas, the pan-continental Stoxx Europe 600 fell 0.5%.

The yield on the U.K.’s 10-year benchmark gilt rose to 1.139% Monday from 1.093% Friday, after Bank of England Gov. Andrew Bailey said over the weekend that the central bank would “have to act” to curb price pressures, despite the uptick in inflation likely being temporary. The U.K.’s shorter-dated government bonds sold off heavily as traders priced in earlier interest rate increases—potentially as soon as November, when the bank’s monetary policy committee meets next.

— Frances Yoon and Anna Hirtenstein contributed to this article.Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Caitlin McCabe at caitlin.mccabe@wsj.com