Stocks extended a selloff on Friday and the dollar held near a three-week high as the twin blows of high inflation and slowing economic growth stirred investor anxiety.

An Asian equity gauge shed 1%, in part as Chinese tech shares slid on uncertainty over the regulatory outlook and Covid lockdowns.

Alibaba Group Holding Ltd. was in the red after China’s regulator denied a Bloomberg News report that it had started early stage discussions on reviving the initial public offering of Jack Ma’s Ant Group Co.

European futures retreated and US contracts wavered. The S&P 500 index lost 2.4% on Thursday, with the drop accelerating in the last hour of trading.

Short-dated US Treasury yields are near 2022 highs following a euro-area bond-market selloff after the European Central Bank opened the door to a half-point interest-rate hike in the fall.

The dollar-yen pair was steady but still in sight of the 2002 high of 135.15 per dollar.

The next test for markets is the US inflation print on Friday, which will provide clues about how aggressively the Federal Reserve must raise rates. The data are expected to show annual consumer-price gains of more than 8%.

“We’ve reconnected that inverse link between bond yields and stock prices,” Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., said on Bloomberg Television. “There’s a bit more chatter, call it whisper numbers, for the CPI being a little north of expectations. You add in a more hawkish stance by the ECB and you have another weaker day.”

The European Central Bank made no change to the deposit rate but prepared to hike by a quarter-point next month, and again by either that amount or more if inflation — which now exceeds 8% in the euro area — warrants a tougher stance.

In commodities, oil edged lower in part on concerns about demand as Shanghai prepares to lock down seven districts this weekend to conduct Covid testing.

Chinese President Xi Jinping called on his government to adhere “unwaveringly” to its Covid Zero policy, while at the same time striking a balance with the needs of the economy.

The latest Chinese data showed factory-gate inflation moderated in May, while Covid restrictions kept consumer inflation in check.

Stocks

• S&P 500 futures were steady as of 10:43 a.m. in Tokyo. The S&P 500 fell 2.4%
• Nasdaq 100 futures were little changed. The Nasdaq 100 fell 2.7%
• Japan’s Topix index lost 0.8%
• Australia’s S&P ASX/200 index fell 0.7%
• South Korea’s Kospi index shed 1.2%
• Hong Kong’s Hang Seng index fell 1.1%
• China’s Shanghai Composite index dropped 0.2%
• Euro Stoxx 50 futures declined 0.9%

Currencies

• The Bloomberg Dollar Spot Index was steady
• The euro was at $1.0621
• The Japanese yen was at 134.26 per dollar
• The offshore yuan was at 6.6985 per dollar

Bonds

• The yield on 10-year Treasuries advanced one basis point to 3.05%
• Australia’s 10-year bond yield increased five basis points to 3.65%

Commodities

• West Texas Intermediate crude fell 0.8% to $120.57 a barrel
• Gold was at $1,846.09 an ounce, down 0.1%