Global stocks slide as markets brace for more rate hikes | Business

After a day of losses in most Asian markets, European stocks opened lower as investors braced for another rate hike by the Federal Reserve this week.

Britain is mourning a day for Queen Elizabeth II. Japanese markets were closed for a holiday.

Germany’s DAX fell 0.3% to 12,701.41, while the Paris CAC 40 lost 0.9% to 6,023.55. S&P 500 futures fell 0.6%, while the Dow Jones Industrial Average contract fell 0.5%.

Markets have been on edge due to stubbornly high inflation and interest rate hikes designed to combat it. There are concerns that the Federal Reserve and other central banks could exceed their policy targets, triggering a recession.

Most economists predict the Fed will raise its key lending rate by another three-quarters of a point when central bank leaders meet this week.

“Indeed, hawkish expectations built on ‘behind the scenes’ U.S. inflation data mean the market has good reason to brace for headwinds in the prospect of higher (longer) interest rates; and arguably the dollar (dollar) will too” Long-term higher,” Mizuho Bank’s Vishnu Varathan said in comments.

Hong Kong’s Hang Seng lost 1 percent to 18,565.97, while the Shanghai Composite lost 0.4 percent to 3,115.60. Australia’s S&P/ASX 200 fell 0.3% to 6,719.90. In Seoul, the Kospi fell 1.1 percent to 2,355.66.

The Bank of Japan meets on Wednesday and Thursday to deal with mounting pressure on the yen to fall sharply against the dollar. This increases costs for businesses and consumers, who must pay more for imports of oil, gas and other essential goods.

However, the Bank of Japan has so far held on to keeping its benchmark interest rate at an ultra-low minus 0.1% in a bid to stimulate investment and spending.

Investors were even more worried on Friday after FedEx issued a stark warning on Friday about rapidly deteriorating economic trends. The S&P 500 fell 0.7% and the Nasdaq lost nearly 1%. The Dow Jones fell nearly half a percent.

The S&P 500 fell 4.8% for the week, with most of the loss coming from a 4.3% drop following Tuesday’s unexpectedly popular inflation report.

All major stock indexes have fallen in four of the past five weeks.

FedEx Corp fell 21.4% on Friday in its biggest one-day sell-off on record, after the company warned investors that its fiscal first-quarter profit could be lower than expected due to a slump in business. Package delivery services are also closing storefronts and corporate offices, and business conditions are expected to weaken further.

Higher interest rates tend to weigh on stocks, especially the pricier tech sector. The real estate sector has also been hurt as interest rates have risen. Average U.S. long-term mortgage rates climbed above 6 percent last week for the first time since the 2008 housing crash. Higher interest rates could make an already tight housing market more expensive for U.S. home buyers.

Recent U.S. government reports showing prices for nearly everything but natural gas are still rising, the job market remains hot and consumers continue to spend, all provide ammunition for Fed officials who say the economy can tolerate more rate hikes.

In other trade on Monday, U.S. benchmark crude fell $1.50 to $83.61 a barrel in electronic trading on the New York Mercantile Exchange. It edged up 1 cent to $85.11 a barrel on Friday.

Brent crude fell $1.30 to $90.05 a barrel.

The dollar strengthened from 142.94 yen to 143.41 yen. The euro fell to 99.82 cents from $1.0014.

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