Dow down 382 points, dollar soars as investors examine recovery bets


Wall Street opened lower on Friday as investors reassessed their position after the Federal Reserve forecast interest rate hikes earlier than previously thought, while the dollar and US Treasury yields continued to slide. gain ground.

All three major US indices opened lower, with the Dow Jones Industrial Average down 382.96 points, or 1.13%, the S&P 500 down 32.76 points, or 0.78%, and the Nasdaq Composite losing 63.01 points, or 0.44%.

The MSCI Global Equity Index, which tracks the stocks of 45 countries, fell 6.43 points or 0.9%.

The liquidation in the United States intensified after Federal Reserve Chairman James Bullard told CNBC inflation was more intense than expected. His remarks came two days after Fed officials forecast interest rate hikes as early as 2023, while promising to maintain strong monetary support as the economy recovers.

Following Bullard’s comments, the US dollar index jumped to 92.270, the highest in more than two months, and 10-year US Treasury yields rebounded above 1.5% after Thursday’s drop . [US/]

“It’s a little dust settling, without panic and the reaction of the adults is encouraging,” said Ned Rumpeltin, European head of foreign exchange strategy at TD Securities.

While the Fed’s message on Wednesday indicated no clear end to supportive measures such as bond buying, earlier-than-expected rate hike signals indicated its concern about inflation as the economy America is recovering from the COVID-19 pandemic.

Friday is also the “quadruple witch day” on Wall Street, when options and futures on stocks and stock indices expire, which can trigger market volatility near market close.

The dollar was heading for its best week in nearly nine months as investors anticipated the earlier-than-expected end of the extraordinary US monetary stimulus.

The strength of the greenback pushed oil lower for a second straight session, while spot gold remained down around 5% for the week after the Fed dented the appeal of the yellow metal as safe investment.

In Europe, the pan-European STOXX index fell 1.31% to 453.34 points, down from Monday’s record 460.51.

INFLATION GENIUS

“What’s pretty obvious is that the inflation genius is starting to roll out of the bottle, and that will be a major driver of interest rates in the short and medium term,” said James McGlew, executive director of the company stock exchange at Argonaut. in Perth.

In Europe, analysts were already wondering if the Bank of England, whose monetary policy committee would meet next week, would follow in the Fed’s footsteps and take a more bullish tone on the economy and what that would mean for the British stimulus and interest rates.

Gold prices, which plunged following the Fed’s statement, edged up but were still set for their worst week since March 2020. Spot gold rose 0.1% for the latest times to $ 1,775 an ounce.

Higher inflation expectations continued to push up yields on long-term US Treasuries. Benchmark 10-year bonds fell 1.5056%.

Oil prices were hit by the strength of the dollar as concerns about demand and the new Iranian supply weighed down.

Global benchmark Brent crude fell 0.04% to $ 73.06 a barrel after settling at its highest price since April 2019 on Wednesday. U.S. West Texas Intermediate crude, which hit its highest level since October 2018 on Wednesday, rose 0.37% to $ 71.29.

This story was posted from an agency feed with no text editing. Only the title has been changed.

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