US stock index futures were flat in early pre-market trading
Wall Street stocks fell for a second day on Wednesday after the Federal Reserve gave more details on how fast it will tighten monetary policy. The Fed’s meeting minutes indicated that officials agreed it should shrink its balance sheet by $95 billion per month. The central bank’s hawkish tone raised concerns it may slow the economy. After a bounce from session lows, the Dow Jones finished 0.42% lower, the S&P 500 slid nearly 1%, and the Nasdaq Composite sank another 2.22%.
Hawkish comments from the Fed sparked a sell-off in Asian on Thursday, with the COVID-19 lockdowns in China also weighing on investor sentiment. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.53% and Japan’s Nikkei 225 dropped 1.69%. China’s stocks fell nearly 1% as Shanghai reported over 19,000 new cases on April 6. South Korea’s Kospi declined 1.4% and Australia’s S&P/ASX 200 gave up 0.6%.
In Europe, however, equities opened slightly higher as markets are getting steadier after the latest sell-off. Europe’s Stoxx 600 gained 0.4% in early deals a day after it posted its biggest slide in a month. On the data front, German industrial production came in at +0.2% in February versus +2.7% in the previous month. US stock index futures were flat in early pre-market trading as market players keep digesting the Fed’s message.
In currencies, the US dollar notched the fifth bullish session in a row on Wednesday to register a fresh May 2020 high of 99.77 as the yield on 10-year Treasury notes continued to rally amid hawkish Fed. Amid the resurgent safe-haven demand, the USD index is now heading towards the psychological figure of 100.00. On Thursday, the USD index has corrected slightly lower to settle around 99.60 amid local profit-taking after a rally.