The pan-European STOXX 600 index dropped over 1.0% in early trade
Wall Street closed at fresh all-time highs overnight after minutes of the Federal Reserve’s latest meeting gave an upbeat outlook for the U.S. economic recovery. Some members saw inflation as rising quicker than projected, however. The bank also stressed that the economy has not made enough progress and that more evidence is needed before acting. As a result, the S&P 500 index rose 0.34% to 4,358.13, the Dow Jones Industrial Average added 0.30%, and the Nasdaq Composite gained less than 0.1%.
Meanwhile, Asian stocks fell to a six-week low on Thursday amid a widening Chinese tech crackdown. Japan’s Nikkei 225 lost 0.9% after experts recommended a state of emergency in Tokyo from Monday through August 22. South Korea reported a one-day record increase of new coronavirus infections, adding to the negative tone in regional markets. MSCI’s index of Asia shares outside Japan fell 1% to its lowest since late May.
European stocks fell on Thursday, as global sentiment soured on economic recovery and pandemic-related worries. The pan-European STOXX 600 index dropped over 1.0% in early trade. Later today, the European Central Bank is widely expected to set its inflation target at 2% in a policy review.
Meanwhile, the dollar dipped in the immediate reaction to the FOMC minutes but rebounded. The USD index climbed to fresh early-April highs on Wednesday before turning mixed today. EURUSD met support around 1.1780 to erase yesterday’s losses in recent trading. The pair has settled marginally above 1.1820 ahead of the ECB policy review and US jobless claims data due later in the day.