US stocks fell sharply in late trading after comments by the head of the Bank of England (BoE) on removing market support, weighed on investor sentiment. Benchmark Treasury yields rose and the dollar edged higher.
The S&P 500 slipped amid renewed selling in tech stocks that sent the Nasdaq 100 down more than 1%. The long-end treasury bore the brunt of losses and the pound subsequently fell BOE Governor Andrew Bailey Urged investors to liquidate closed positions that they cannot maintain, adding that the central bank will stop intervening in the market as planned later this week.
“When Andrew Bailey makes a comment that he will pause Qi on Friday, it will be an interesting test,” Jimmy Chang, chief investment officer at Rockefeller Global Family Office, told BTV. “It’s a very interesting line in the sand. Will the market pull back? How high will the yield go? We’ll see.”
Risk sentiment remained fragile after a four-day losing streak wiped $1.6 trillion from the value of the S&P 500 index ahead of US inflation readings. The data could seal the case for another 75-basis-point interest rate hike at the Federal Reserve meeting Thursday in the absence of a major shortfall.
Nor has officials given any inclination to halt their rate-hike cycle in the near future, with Cleveland Fed Chair Loretta Meester saying Tuesday that officials need to raise interest rates and cannot become complacent.
In addition to inflation data, as large US banks kicked off third-quarter earnings season later this week, strategists prepared for weak profits against a flurry of warnings on the rising risk of a global recession. The International Monetary Fund joined in warning of a worsening outlook, as efforts to curb inflation could be hurt by the war in Ukraine and China’s recession.
Michael Kelly, head of the multi-asset team at Pinebridge Investments, told Bloomberg TV, “We haven’t seen the impact of the tightening. It’s ahead and when we look, it’s another leg down for riskier assets.”
Meanwhile, Russian President Vladimir Putin threatened more missile strikes on Ukraine after hitting Kyiv and other cities in the most intense attacks since the first days of the invasion.
Christopher Smart, chief global strategist at Barings, said in a note: “It is not surprising that investors enter the week in a gloomy mood, especially with headlines from Ukraine indicating a further escalation in geopolitical tensions. ”
Under the pressure of world development, US oil futures It fell nearly 2%, excluding last week’s 17% rally.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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