Risk tones keep on the defensive ahead of Fed meeting
Wall Street stocks fell on Friday to see their worst weeks since June as the selling pressure persisted across the markets. The Dow Jones Industrial Average dropped 0.45%, the S&P 500 shed 0.72% and the Nasdaq Composite slid 0.90%. Furthermore, the three major averages suffered their fourth losing week in five. The Dow declined 4.1%, the S&P 500 lost 4.8%, while the Nasdaq Composite dropped about 5.5% last week. In individual stocks, shares of FedEx lost more than 20% to suffer the worst daily drop ever after the company said it will implement cost-cutting initiatives.
Asian equities were under pressure on Monday as investors await major central bank meetings this week. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5%. In mainland China, the Shanghai Composite dipped 0.35%, the Hang Seng index in Hong Kong was 1% lower, South Korea’s Kospi shed 1.14% and the S&P/ASX 200 in Australia was 0.28% lower. Japan’s market was closed for a holiday Monday. The Bank of Japan is expected to keep rates on hold at ultra-low levels during the meeting this week.
In Europe, stocks opened lower to start the week as investors expressed concerns about the US Federal Reserve’s upcoming monetary policy meeting. Risk tones keep on the defensive today, with US stock index futures pointing lower in early pre-market deals. The pan-European Stoxx 600 slipped nearly 3% last week, staying on the defensive today. The U.K.’s FTSE 100 is closed Monday to mark the funeral of Queen Elizabeth II.
Meanwhile, the US dollar is back on the offensive following a two-day slide, challenging the 110.00 mark in early European deals as safe-haven demand persists. However, the USD index could refrain from a more robust ascent in the near term as traders await the Fed meeting that concludes on Wednesday. As such, EURUSD is back below the 20-DMA, struggling to regain parity as the greenback remains elevated amid rising Treasury yields.
