Investors continue to digest tightening in regulation by Chinese authorities
Wall Street stocks pulled back from record highs overnight as investors awaited a Federal Reserve meeting outcome due later on Wednesday. Regulatory crackdown in China weighed on market sentiment as well, with selling was most pronounced in technology and communication stocks. As a result, the Nasdaq shed 1.21%, the S&P 500 fell 0.47%, and the Dow Jones dropped 0.24%.
Asian equities finished mixed-to-lower on Wednesday, with investors further digesting tightening in regulation by Chinese authorities. Market players worry about possible new action after Beijing stepped up anti-monopoly and data security enforcement in the country. The Shanghai Composite Index declined 0.58%, the Nikkei 225 in Tokyo fell 1.39%. The Hang Seng in Hong Kong climbed 1.54%, while Sydney’s S&P-ASX 200 gave up 0.70%.
In Europe, stocks opened mixed on Wednesday, with the pan-European STOXX 600 index climbing 0.1% in early trade. In individual stocks, German lender Deutsche Bank rallied nearly 4% after it delivered a better-than-expected quarterly profit. It also raised its revenue guidance for 2022.
Meanwhile, the USD index reversed the recent decline and regained the 92.50 area as US 10-year yields rebounded past the 1.25% level. Still, a cautious tone will likely prevail among market participants ahead of the upcoming FOMC event that could set the tone for dollar pairs later today. A hawkish tone by Powell may push the greenback higher across the board.
Elsewhere, gold prices continue to oscillate around the 20- and 100-DMAs, struggling for direction these days. The precious metal is clinging to the $1,800 figure, a decisive break above which would pave the way to the 200-DMA, today at $1,821. However, should the dollar rally following the Fed meeting, the bullion would come back under selling pressure.