- Stocks Slump as Rate-Hike Outlook Damps Sentiment
Shares opened the week lower amid intensifying concern over the impact of tightening monetary policy after strong labor market data reinforced expectations for more aggressive interest rate hikes from the Federal Reserve.
Bond yields climbed in Australia and New Zealand, following gains in US Treasury yields on Friday after the labor figures solidified wagers that the Fed will raise rates by 75 basis points for a fourth straight time next month. Almost 95% of the companies in the S&P 500 fell and the Nasdaq 100 sank nearly 4%.
The dollar fluctuated versus its Group-of-10 counterparts as investors weighed the campaign by central banks to quell inflation with higher borrowing costs.
All eyes will now be on this week’s US inflation data after a hotter-than-expected reading in August tempered hopes of a nascent slowdown. Separately, minutes from the Fed’s September meeting will give clues into the central bank’s tolerance for economic pain.