US stocks drop, extending a losing streak | Financial Markets News

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The S&P 500 has fallen about 15 percent this year.

By Bloomberg

Stocks dropped amid concern over how much the Federal Reserve will have to boost rates to tame decades-high inflation without throwing the economy into a recession.

Traders will be closely watching a host of central bank speakers this week after Chair Jerome Powell on Wednesday played down the option of a 75 basis-point rate hike. Federal Reserve Bank of Atlanta President Raphael Bostic told Bloomberg Television he favors policy makers continuing to raise rates by half-point increments rather than doing anything larger. Meantime, his Minneapolis counterpart Neel Kashkari said he’s confident officials will bring inflation down.

The S&P 500 traded near its lowest level in a year. The gap between five- and 30-year rates grew to the widest in just over six weeks as long-dated bonds came under pressure. Two-year notes — the most sensitive to imminent changes in policy — rallied, with yields tumbling. The dollar advanced.

The outlook for US stocks isn’t particularly bright, even if an outright recession is avoided, according to Goldman Sachs Group Inc. strategists. The S&P 500 has fallen about 15% this year as high inflation readings, a slowing economy and aggressive tightening by the Fed have weighed on risk appetite and valuations.

Here are key events to watch this week:

  • Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, New York Fed President John Williams, Fed Governor Christopher Waller speak, Tuesday
  • Atlanta Fed President Raphael Bostic speaks, Wednesday
  • US CPI, WednesdayEIA crude oil inventory report, Wednesday
  • San Francisco Fed President Mary Daly speaks, Thursday
  • US PPI, initial jobless claims, Thursday
  • University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

  • The S&P 500 fell 1.5% as of 9:31 am New York time
  • The Nasdaq 100 fell 1.7%
  • The Dow Jones Industrial Average fell 1.3%
  • The Stoxx Europe 600 fell 1.8%
  • The MSCI World index fell 1.6%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.3%
  • The euro was little changed at $1.0542
  • The British pound was unchanged at $1.2348
  • The Japanese yen fell 0.2% to 130.76 per dollar

Bonds

  • The yield on 10-year Treasuries was little changed at 3.12%
  • Germany’s 10-year yield was little changed at 1.13%
  • Britain’s 10-year yield was little changed at 1.99%

Commodities

  • West Texas Intermediate crude fell 2.3% to $107.26 a barrel
  • Gold futures fell 0.8% to $1,866.90 an ounce

–With assistance from Sunil Jagtiani, Srinivasan Sivabalan, John Viljoen and Vildana Hajric.

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