Stocks declined across global financial markets after a wave of rate hikes from central banks, with the Federal Reserve and the European Central Bank warning of more pain to come.
(Bloomberg) — Stocks declined across global financial markets after a wave of rate hikes from central banks, with the Federal Reserve and the European Central Bank warning of more pain to come.
The tech-heavy Nasdaq 100 dropped more than 3%. The S&P 500 fell the most intraday in more than a month. Both indexes ended Wednesday in the red after Fed Chair Jerome Powell reiterated his hawkish stance and policymakers signaled a peak rate that was above market expectations.
Europe’s equity benchmark, the Stoxx 600, fell after ECB President Christine Lagarde said the central bank needs to do more than traders priced in.
The US dollar strengthened. Britain’s pound fell after an expected half-point hike from the Bank of England and extended those losses. The euro dropped as traders parsed Lagarde’s remarks.
Read More: ECB Hikes by Half Point as Lagarde Warns of More Such Moves
A global rally sparked by softer-than-forecast US consumer price index data came to an abrupt halt on Wednesday after the Fed sought to dispel hopes for a rate cut next year. Powell reaffirmed the central bank won’t back down from its fight against inflation despite mounting fears of job losses and a recession. But he also signaled the central bank is getting close to reaching the end of its tightening cycle.
Investors are also parsing a bevy of US economic data Thursday. While retail sales were worse than expected, initial jobless claims came in lower than expected, underscoring the strength in the labor market. US factory production, meanwhile, declined for the first time since June.
“Markets have been in a tug-of-war between better-than-feared economic data juxtaposed with concerns about the potential for the Fed to over-tighten monetary policy and push the economy into a recession,” said Art Hogan, chief market strategist at B. Riley Wealth.
Key events this week:
- Eurozone S&P Global PMI, CPI, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 fell 2.4% as of 11:13 a.m. New York time
- The Nasdaq 100 fell 3.1%
- The Dow Jones Industrial Average fell 2.1%
- The Stoxx Europe 600 fell 2.5%
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index rose 0.9%
- The euro fell 0.3% to $1.0648
- The British pound fell 1.7% to $1.2216
- The Japanese yen fell 1.6% to 137.65 per dollar
Cryptocurrencies
- Bitcoin fell 2.3% to $17,427.18
- Ether fell 3.1% to $1,270.44
Bonds
- The yield on 10-year Treasuries declined three basis points to 3.45%
- Germany’s 10-year yield advanced 14 basis points to 2.08%
- Britain’s 10-year yield declined nine basis points to 3.23%
Commodities
- West Texas Intermediate crude fell 1.1% to $76.44 a barrel
- Gold futures fell 1.7% to $1,788 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee and Srinivasan Sivabalan.
More stories like this are available on bloomberg.com
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