US stocks, futures fall as Fed outlook reflected: Markets roundup

(Bloomberg) — Stocks fell along with U.S. stock futures on Monday amid escalating threats to global economic growth, particularly the Federal Reserve’s commitment to tighter monetary policy to curb inflation.

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Losses for stock markets in Japan, Australia and South Korea were in the region of 1% after the worst week for global shares since late June.

The S&P 500, Nasdaq 100 and European futures suffered losses, and the dollar gauge was at a more than one-month high, further signs of investor caution.

Australian and New Zealand government bonds edged lower and the yield on US 10-year Treasuries climbed to around 2.99%, extending Friday’s sell-off.

Global stocks’ rally from June’s bear market bottoms has begun to cool, weighed down by repeated warnings from the Fed that interest rates are on the rise. Worrying global economic developments, most recently including power shortages in a Chinese industrial hub, also loom over investors.

Key for markets this week is the Fed’s symposium in Jackson Hole, Wyoming. The recent surge in stocks has loosened financial conditions, making it harder to deal with inflation.

The symposium gives Fed Chairman Jerome Powell a platform to reset the market’s expectations for a shift to slower rate hikes. The latest bets have helped fuel the recent recovery in capital, but are vulnerable to the possibility of sustained upward price pressures even as economic growth falters.

“Stay Hawk”

“Central bankers, including Fed Chairman Powell, are likely to remain steadfast in their approach to inflation, albeit with some caution given the looming economic downturn,” wrote Shane Oliver, head of investment strategy at AMP Services Ltd. Note.

In China, Bloomberg Economics expects key lending rates to fall 10 basis points later on Monday as banks follow the People’s Bank of China’s decision to cut the key rate.

The world’s second-largest economy faces restrictions on mobility amid rising Covid cases and ongoing problems in the property sector, in addition to a power crisis in Sichuan province, a key manufacturing hub.

China’s demand outlook is weighed down by oil falling below $90 a barrel. Traders are eyeing nuclear talks with Iran that could lead to more supplies.

What to watch this week:

  • Key lending rates in China, Monday

  • US New Home Sales, S&P Global PMI, Tuesday

  • The Fed’s Neil Kashkari spoke at a question-and-answer session on Tuesday

  • US Durable Goods, MBA Mortgage Applications, Upcoming Home Sales, Wed

  • US GDP, initial jobless claims. Thursday

  • Annual Fed Policy Symposium in Jackson Hole, Wyoming, Thursday

  • The minutes from the ECB for July, Thursday

  • Fed Chairman Powell speaks in Jackson Hole, Friday

  • US Consumer Income, PCE Deflator, Friday

Some of the major moves in the markets:

Stock up

  • S&P 500 futures lost 0.6% as of 9:26 a.m. in Tokyo. S&P 500 down 1.3%

  • Nasdaq 100 futures lost 0.7%. Nasdaq 100 down 2%

  • Japan’s Topix index fell 0.7%

  • Australia’s S&P/ASX 200 index was 1.1% lower

  • South Korea’s Kospi index fell 1.2%

  • Hang Seng index futures were down 0.9 percent earlier


  • The Bloomberg Dollar Spot index added 0.2%

  • The euro was at $1.0027, down 0.1%

  • The Japanese yen was at 137.24 per dollar, down 0.2%

  • The offshore yuan was at 6.8440 per dollar, down 0.1%



  • West Texas Intermediate crude fell 1.2% to $89.70 a barrel

  • Gold was at $1,745.26 an ounce, down 0.1%

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