NEW YORK (AP) — Stocks have opened lower on Wall Street as investors brace for a big rate hike by the Federal Reserve this week. Crude oil prices also fell in early trading on Monday. Major U.S. indices fell about a third of a percent early on, pushing Treasury yields higher. Markets are looking forward to Wednesday when the Federal Reserve will release its latest decision on interest rates. In the fight against inflation, it is expected to raise the benchmark interest rate by another three-quarters, which will affect interest rates across the economy.
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NEW YORK (AP) — Wall Street fell ahead of Monday’s opening bell, ahead of expectations for another big rate hike by the US Federal Reserve (Fed).
Dow Jones futures and S&P 500 futures each fell 0.9%.
Britain was observing a day of mourning for Queen Elizabeth II. Japanese markets are closed for public holidays.
Germany’s DAX fell 0.4% and Paris’ CAC 40 fell 1%.
Stubbornly high inflation and rising interest rates to counteract it have put the market on edge. The concern is that the Fed and other central banks could overshoot their policy targets and trigger a recession.
Most economists expect the Fed to raise the primary lending rate by another three-quarters of a percentage point when central bankers meet this week.
“The fact is that hawkish expectations built on US inflation printing ‘under the hood’ suggest that markets have good reason to brace for headwinds in the prospect of higher (longer) interest rates. Arguably, the U.S. dollar is also “high in the long run,” Mizuho Bank’s Vishnu Varathan said in a comment.
Hong Kong’s Hang Seng fell 1% to 18,565.97 and the Shanghai Composite Index fell 0.4% to 3,115.60. Australia’s S&P/ASX 200 was up 0.3% at 6,719.90. In Seoul, Kospi was down 1.1% to 2,355.66.
Japan’s central bank will meet on Wednesday and Thursday as pressure mounts to counter a sharp decline in the yen’s value against the dollar. This has led to higher costs for businesses and consumers, who have had to pay more to import oil, gas and other commodities.
But the Bank of Japan has so far stuck to keeping interest rates at minus 0.1% in hopes of stimulating investment and spending.
Friday’s stern warning from FedEx that economic trends were deteriorating rapidly heightened market anxiety. The S&P 500 dropped him 0.7% and the Nasdaq dropped almost 1%. The Dow fell nearly 0.5%.
The S&P 500 is down 4.8% in a week. Much of the loss comes from his 4.3% plunge on Tuesday following a surprisingly hot report on inflation.
All major indices have now posted losses in four of the last five weeks.
FedEx plunged 21.4% on Friday in a record single-day sell-off after warning investors that a downturn in business would likely put first-quarter earnings below expectations. Couriers have also closed stores and corporate offices, further deteriorating the business environment.
Rising interest rates tend to weigh on stocks, especially the more expensive tech sectors. The housing sector has also been hit by rising interest rates. Average long-term mortgage rates in the US have topped 6% for the first time since the 2008 housing crash. Rising interest rates could make an already tight housing market even more expensive for US homebuyers.
However, rate hikes have yet to significantly cool the economy.
Last week, the U.S. reported consumer prices were up 8.3% through August compared to last year, the job market is still overheating and consumers are continuing to spend, all of which has led Fed officials to ammunition, saying the economy can withstand further rate hikes. .
In other trading on Monday, US benchmark crude fell from $2.01 to $83.10 a barrel in electronic trading on the New York Mercantile Exchange. It rose one cent higher to $85.11 a barrel on Friday.
Brent crude rose from $1.93 to $89.42 per barrel.
The dollar rose from 142.94 yen to 143.57 yen. The euro has fallen from $1.0014 to he 99.93 cents.
AP Business Writer Elaine Kurtenbach contributed to this report from Bangkok.
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