GLOBAL MARKETS DJIA 32856.46 -574.98 -1.72% Nasdaq 11530.33 -145.40 -1.25% S&P 500 3986.37 -62.05 -1.53% FTSE 100 7919.48 -10.31 -0.13% Nikkei Stock 28380.71 71.55 0.25% Hang Seng 20111.49 -422.99 -2.06% Kospi 2436.38 -26.97 -1.09% SGX Nifty* 17715.50 -137.5 -0.77% *March contract USD/JPY 137.42-43 +0.20% Range 137.50 137.04 EUR/USD 1.0536-39 -0.10% Range 1.0558 1.0538 CBOT Wheat March $6.846 per bushel Spot Gold $1,813.09/oz Unch Nymex Crude (NY) $77.43 -$3.03 U.S. STOCKS
The Dow Jones Industrial Average dropped nearly 600 points Tuesday after Federal Reserve Chair Jerome Powell said the central bank would likely lift interest rates more than previously expected to fight inflation and cool down the economy.
The blue-chip index fell 574.98 points, or 1.7%, to 32856.46. The S&P 500 dropped 62.05 points, or 1.5%, to 3986.37. The technology-focused Nasdaq Composite retreated 145.40 points, or 1.2%, to 11530.33.
The declines were broad: 29 of the 30 stocks in the Dow declined as did all 11 sectors in the S&P 500.
In the first of two hearings on Capitol Hill this week, Mr. Powell told the Senate Banking Committee that continued strength in hiring, spending and factory production has partly reversed softening inflation trends from late last year.
Traders in interest-rate futures expect the federal-funds rate to reach as high as 5.6% in October and sit around 5.5% at year-end, according to FactSet.
ASIAN STOCKS
The Nikkei Stock Average was flat at 28300.92 as gains in utility stocks help offset losses in tech shares. Concerns grow about the Fed's further tightening following Chair Jerome Powell's comments. Investors were focusing on economic data and their policy implications. Broader market index Topix was up 0.1% at 2046.20.
South Korea's benchmark Kospi fell 1.2% to 2432.80 in early trade, tracking Wall Street's losses overnight following hawkish remarks from Fed Chair Jerome Powell. Shipbuilders, steel and battery stocks were leading the Kospi's retreat. USD/KRW rose 1.4% to 1,317.20 after Powell opened the door to a larger-than-expected half-percentage-point rate increase to fight inflation during his congressional testimony. Foreign and institutional investors were both net sellers.
Hong Kong's Hang Seng Index fell 1.4% to 20246.01 in early trade, tracking Wall Street's selloff overnight. The key theme has been risk-off after Fed Chair Powell warned in his congressional testimony that the U.S. central bank was prepared to turn more aggressive on rate increases once again, Commerzbank analysts said. Losses on the HSI are broad-based, with tech firm Baidu down 2.4%, retailer JD.com off by 2.8%, and property group Country Garden Services down 2.6%. The Hang Seng Tech Index was down 2.3% at 4025.93.
Chinese shares were lower in early trade, following declines on Wall Street after Fed Chair Powell said that the U.S central bank was prepared to speed up rate increases to combat inflation and cool down the economy. Investors were also cautious after Beijing unveiled a plan to restructure the bureaucracy. Most shares were down with energy and banking stocks weighing on the market. Chip makers and software companies were higher. The benchmark Shanghai Composite Index was down 0.4% at 3271.88, while the Shenzhen Composite Index and ChiNext Price Index were each 0.3% lower.
FOREX
Asian currencies are mixed against USD in the morning session, but may weaken on fears of aggressive tightening by the Fed. Fed Chair Powell has jolted markets by raising the possibility of quickening the pace of rate increases, given recent slew of stronger-than-expected economic data, Alvin T. Tan, head of Asia FX Strategy at RBC Capital Markets, says in an email. USD took heart from upward shift in rates and ensuing equity selloff, and USD strength remains the key driver for USD/Asian currency pairs, Tan adds. USD/JPY rises 0.2% to 137.38 and USD/CNY is up 0.1% at 6.9687, while USD/KRW edges 0.1% lower to 1,316.44.
METALS
Gold prices were flat in early Asian trade, but may trend downward following the U.S. Federal Reserve's hawkish stance. "Gold is in the danger zone once again and could see major bearish momentum on the break of the $1,800 level," Oanda said. It reckoned that as Fed Chair Powell is signaling that the central bank could increase interest rates at a faster pace than previously expected, gold prices could struggle as bond yields move higher. The next focus was likely to be on the coming U.S. jobs report, it added. Spot gold was flat at $1,813.09/oz.
OIL SUMMARY
Crude oil prices rose slightly as supply concerns remain in focus. Supply could decline as the U.S. Energy Information Administration has lowered its crude oil production forecasts for 2023 and 2024, citing higher costs, said ANZ. However, hawkish comments from Fed Chair Powell have also raised concerns on whether demand could weaken in the U.S. and offset any optimism over stronger demand from China, ANZ added. The front-month WTI futures contract rose 0.1% to $77.62/bbl while the front-month Brent crude contract inched up 0.1% to $83.41/bbl.
TOP HEADLINES Powell Says Fed Is Prepared to Speed Up Interest-Rate Rises U.S., China Plunge Further Into a Spiral of Hostility China Shakes Up Government as Xi Asserts More Control Over Policy U.S. to Ease Covid Testing Requirements for Travelers From China Bond-market recession gauge plunges to triple digits below zero and reaches fresh four-decade milestone RBA Governor Says Pause in Rate Hikes Is Closer Bank of Canada Expected to Hold Rates Steady South Korea Says U.S. Chips Act Subsidies Have Too Many Requirements Binance.US Cleared to Buy Voyager Accounts Despite SEC Warning Drug to Prevent Preterm Births to Be Pulled From Market FTC Twitter Probe Sought Musk's Communications TikTok Faces More Scrutiny in New Senate Bill Nielsen Holdings Names Warren Jenson as Finance Chief Samuel Adams Brewer's Finance Chief Steps Down Starbucks Chief to Testify Before Senate Panel, Sen. Sanders Says Justice Department Sues to Block JetBlue-Spirit Merger Germany Reviews 5G Network Safety, Opening Door to Possible Huawei Ban RV Market Slows as Inflation, Rising Rates Cool Demand NTSB to Probe Norfolk Southern Safety Culture After Derailments, Accidents Gigi Sohn Withdraws as Nominee for Federal Communications Commission As Russia Steps Up Shelling in Kherson, Ukraine Calls on Residents to Evacuate
(END) Dow Jones Newswires
03-07-23 2215ET
