SHANGHAI, May 10 —This is a roundup of global macroeconomic news last night and what is expected today.
The U.S. dollar reached a new 20-year high on Monday as risk-off sentiment stemming in part from concerns over the Federal Reserve’s ability to combat high inflation boosted the greenback’s safe-haven appeal.
The dollar has risen for five straight weeks as U.S. Treasury yields have climbed on expectations the Fed will be aggressive in attempting to tamp down inflation.
On Monday, Minneapolis Fed President Neel Kashkari said the U.S. central bank may not get as much aid from easing supply chains as it is hoping for in helping to cool inflation. Atlanta Fed President Raphael Bostic said he already sees signs of peaking supply pressures and that should give the Fed room to hike at half-percentage-point interest rate increments for the next two to three policy meetings, but nothing bigger.
Also contributing to the defensive tone was the ongoing war in Ukraine and concerns about rising COVID-19 cases in China.
U.S. stock futures were higher on Monday night after the S&P 500 fell to its lowest level in more than a year.
Dow Jones Industrial Average futures rose by 92 points, or 0.3%. S&P 500 and Nasdaq 100 futures climbed 0.3% and 0.4%, respectively. Shares of AMC and Novavax made moves after hours on the backs of their most recent quarterly reports.
Earlier in the day, the S&P 500 dropped below the 4,000 level, or as low as 3,975.48, to mark the index’s weakest point since March 2021. The broad market index dropped 17% from its 52-week high as Wall Street continued to struggle finding a bottom after last week’s losses.
The Dow Jones Industrial Average dropped 1.99%, down more than 12% from 52-week highs. The S&P 500 fell 3.2%. The tech-heavy Nasdaq Composite lost 4.29%, off more than 27% from 52-week highs.
Oil prices sank about 6% on Monday alongside equities, as continued coronavirus lockdowns in China, the top oil importer, fed worries about the demand outlook.
Brent crude fell $6.45, or 5.7%, to settle at $105.94 a barrel. U.S. West Texas Intermediate crude fell $6.68, or 6.1%, to settle at $103.09 a barrel. Both contracts have gained about 35% so far this year.
Crude imports by China in the first four months of 2022 fell 4.8% from a year ago, but April imports were up nearly 7%.
China’s Iranian oil imports in April came off peak volumes seen in late 2021 and early 2022 as demand from independent refiners weakened after COVID lockdowns pummelled fuel margins and on growing imports of lower-priced Russian oil.
Gold prices extended their retreat to fall more than 1% on Monday as the dollar hovered near two-decade highs, dimming the metal’s appeal.
Spot gold was down 1.4% at $1,856.26 per ounce by 2:00 p.m. ET. U.S. gold futures settled down 1.3% at $1,858.60.
The pan-European Stoxx 600 provisionally ended down 2.8%, hitting its lowest level since Mar. 8. Travel and tech shares led the losses, down 5.8% and 4.8% respectively, as all sectors and major bourses traded firmly in negative territory.
The risk aversion for European markets comes after regional stocks retreated at the end of the last trading week on the back of a rout in U.S. markets, with Wall Street posting its worst day since 2020 last Thursday.