The S&P 500 is down 15 percent this year.
Stocks fell amid concerns about how much the Federal Reserve will have to raise rates to rein in decades-high inflation without tipping the economy into recession.
Traders will be watching a slew of central bank speakers this week after Chairman Jerome Powell downplayed the option of a 75 basis point rate hike on Wednesday. Federal Reserve Bank of Atlanta President Raphael Bostic told Bloomberg Television that he favors policymakers continuing to raise rates in half-point increments rather than doing anything bigger. Meanwhile, his Minneapolis counterpart, Neel Kashkari, said he is confident authorities will bring inflation down.
The S&P 500 traded near its lowest level in a year. The gap between 5-year and 30-year rates grew to the maximum in just over six weeks as long-dated bonds came under pressure. Two-year notes, the most sensitive to impending changes in policy, rallied and yields plummeted. The dollar advanced.
The outlook for U.S. stocks isn’t particularly bright, even if an outright recession is averted, according to strategists at Goldman Sachs Group Inc. The S&P 500 has fallen about 15% this year as high inflation readings, the Slowing economy and aggressive Fed tightening have affected risk appetite and valuations.
Here are key events to watch this week:
- Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, New York Fed President John Williams and Fed Governor Christopher Waller speak Tuesday.
- Atlanta Fed President Raphael Bostic speaks Wednesday
- US CPI WednesdayEIA Crude Oil Inventory Report Wednesday
- San Francisco Fed President Mary Daly speaks Thursday
- US PPI Initial Jobless Claims Thursday
- University of Michigan Consumer Sentiment, Friday
Some of the main movements in the markets:
- The S&P 500 fell 1.5% at 9:31 a.m. New York time.
- The Nasdaq 100 fell 1.7%
- The Dow Jones Industrial Average fell 1.3%
- The Stoxx Europe 600 falls 1.8%
- MSCI World Index fell 1.6%
- The Bloomberg Dollar Spot Index rose 0.3%
- Euro little changed at $1.0542
- The British pound was unchanged at $1.2348
- The Japanese yen fell 0.2% to 130.76 per dollar
- The 10-year Treasury bond yield was little changed at 3.12%
- Germany’s 10-year yield was little changed at 1.13%
- Britain’s 10-year yield was little changed at 1.99%
- West Texas Intermediate crude fell 2.3% to $107.26 a barrel.
- Gold futures fell 0.8% to $1,866.90 an ounce.
–With the assistance of Sunil Jagtiani, Srinivasan Sivabalan, John Viljoen and Vildana Hajric.