Stocks slump to lowest for the year
Global stock markets dropped sharply on Monday, with main stock indexes logging their worst day since June 2020 and their lowest for this year. The market sell-off was driven by technology stocks and the energy sector as the biggest decliners for the session. Broadly, investors rushed to retreat their risky bets amid inflation jitters and interest rate anxiety.
The Dow Jones lost 1.99% to finish the day at 32,245.70. The tech-heavy Nasdaq Composite fell 4.29% to close at 11,623.25, its lowest since November 2020.
Persistently high inflation pressures led the Fed to become more aggressive in its rate hike campaign. Consequently, the hawkish tone from the US central bankers exacerbated an already nervous market while at the same time cast doubt whether the Fed could stage a soft landing. Further, the war in Ukraine and the lockdowns in China added to the gloomy market sentiment.
Inflation data keeps investors on alert
The market is also anticipating the US inflation figure for April slated for release tomorrow. The cost of living for Americans is expected to remain above 8% for the past month, on an annual basis, marking another 40-year high.
Meanwhile, the US dollar held at its highest level in more than 20 years against the Japanese yen, as the USD/JPY hovered above 130.10 early on Tuesday. Elsewhere, bitcoin, known for its volatility, fell to a 10-month low as it briefly dipped below the $30,000-threshold.
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