The impact of the US inflation data reading which brought the highest interest rate hike expectations in 28 years has caused the equity market to remain in decline for 2 consecutive sessions.
Investors predicted the Federal Reserve (Fed) would raise 75 basis points, the biggest gain since 1994, at the FOMC meeting early Thursday morning in the central bank's efforts to control the warm price spike.
This was confirmed in a Goldman Sachs analyst note stating that the Fed will be more consistent in raising rates in an effort to tame inflation and predict a possible recession in mid -2023.
As a result, the Wall Street index experienced a decline with the Dow Jones Industrial down 0.5% to a 16 -and -a -half -month low, the S&P 500 down 0.38% to enter bearish territory and the Nasdaq Composite gaining a slight gain of 0.18%.
The MSCI gauge of worldwide stocks fell 0.65% to its lowest level since November 2020 while the pan-European equity index plunged to a March 2020 low of 1.26%.
The MSCI Asia-Pacific broad index of stocks outside Japan closed 0.59% as Wall Street declined while Japan’s Nikkei lost 1.32%.
As equities declined, government bond yields entered momentum with 2 -year treasury yields rising 3.4560% to the highest level since November 2007 and 10 -year treasury yields reaching 3.4980%, an 11 -year high.
Moreover, the dollar also grabbed the top with the greenback index rising 0.3% at 105.65 while the Euro fell to a 1 -month low of $ 1.04160 and the Japanese Yen hit a new 24 -year low of 135.42.
As for commodities, Brent crude futures fell 1.17% at $ 120.84 a barrel with investors worried about the impact of rate hikes on U.S. demand and tax proposals on oil company profits.
Spot gold was down 0.53% at $ 1,809.40 an ounce as the dollar strengthened and rising yields also put pressure on gold.
Bitcoin (BTC) remained in the fall at $ 20,816 after declining 2.7%.
