Markets recoup some losses from a sharp sell-off witnessed at the start of the week
Wall Street stocks closed lower overnight, but came off session lows ahead of the outcome of the Federal Reserve meeting, with investors guessing when the central bank will raise interest rates and by how much. The Dow Jones shed 0.2%, the S&P 500 fell 1.2% and the Nasdaq Composite gave up 2.3%. In individual stocks, American Express rallied nearly 9% after fourth-quarter earnings surpassed estimates due to record credit card spending. Also, the company boosted forecasts for revenue and profits in 2022.
Asian markets were mostly higher on Wednesday, with MSCI’s broadest index of Asia-Pacific shares outside Japan adding 0.26% while still testing mid-December’s one-year low. Japan’s Nikkei 225 lost 0.44% to hover just above its lowest level since December 2020. Despite the local bounce, concerns about Fed tightening and geopolitical uncertainty (Russia-Ukraine conflict) continue to unnerve investors, capping gains in the markets. Overnight, Biden said that he would consider imposing personal sanctions on Putin if Russia attacked Ukraine.
European equity markets opened higher today, recouping some losses from a sharp sell-off witnessed at the start of the week. The pan-European Stoxx 600 advanced more than 1% in early trade. Now, investors are focused on the latest policy update from the Fed. The central bank is widely expected to signal a rate hike as soon as March.
In currencies, the dollar’s ascent is losing steam as traders are getting more cautious ahead of the Fed’s decision. Still, EURUSD has settled around the flat-line during the European hours, struggling to regain the 1.1300 figure after yesterday’s brief dip towards 1.1260. should the Fed add to the dollar’s bullishness later today, the pair could see another negative session should the Federal Reserve deliver a hawkish message.