Stock futures traded lower on Monday for a week in which the Federal Reserve is expected to raise interest rates by another three-quarters of a point in an effort to tame inflation.
Contracts related to
fell 201 points, or 0.7%, to 30,721,
futures fell 0.7% and
futures were down 0.9%.
Asian stocks fell on Monday. of Hong Kong
fell by more than 1%, led by Chinese stocks like
(ticker: BABA) and
ended the session down 0.4%. European shares were also trading lower, with the London Stock Exchange closed for Queen Elizabeth II’s funeral.
US stocks fell on Friday and markets fell for the week after hotter-than-expected inflation data and an earnings warning from
(FDX) had investors worried about what the shipping giant’s warning might mean for the larger global economy.
The Dow was down 4.1% last week, the S&P was down 4.8% and the Nasdaq was down 5.5%. The three indices have ended in losses four of the past five weeks.
FedEx alert time didn’t sit well with investors, who were already jittery that another aggressive move by the Federal Reserve on interest rates could send the economy into recession. The central bank raised interest rates by 75 basis points at each of its last two policy meetings in June and July.
The Fed’s interest rate decision will be announced on Wednesday afternoon.
Citi economists expect the Fed to raise rates by 75 basis points, saying a 100 basis point increase is possible, though unlikely.
“A surprisingly large increase of 100 bp. would be one way to send a strong, hawkish message, but we think most Fed officials will judge that the potential costs outweigh the benefits,” the economists said. “Financial conditions have generally tightened significantly since last week’s inflation data, and there is not the same need to push against easing conditions that the Fed faced when stock prices rallied over the summer.”
August consumer price data released last week showed that prices rose at 8.3% annual interest, higher than the 8% increase forecast. This is a delay of July and the second month of declining inflation although inflation is declining more slowly than expected.
Oil prices fell on Monday ahead of an expected tightening of monetary policy by the Federal Reserve and
trading below $18,500 to levels last seen towards the end of 2020.
Write to Joe Welfel at [email protected]