U.S. stock futures point to higher losses

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Global markets shrank on Monday, pointing to a sharp sell-off at the opening of U.S. stocks as uncertainty caused by slowing growth, rising inflation, the war in Ukraine and the pandemic continues to scare investors.

Futures reported losses of more than 1.1 percent, or roughly 400 points, for the Dow Jones industry average, accumulating even more pain after the blue chip index suffered its worst decline since the early days of last week’s pandemic. The wider S&P 500 was projected to lose more than 1.5 percent outdoors and the tech-heavy Nasdaq more than 2 percent.

After an initially rosy reaction to the Fed’s interest rate hike on Wednesday – the second of seven scheduled for 2022 – investors were wringing their hands over the central bank’s approach to curbing inflation, which could make borrowing more expensive for corporations and households.

Fed officials are trying to raise interest rates at such a pace that it doesn’t completely stifle economic growth, making it difficult to strike a balance. If the economy cools down too quickly, it could fall into recession, generally defined as two consecutive quarters of decline.

Investors seem to lack confidence that the central bank is going to curb inflation without causing a recession. Cboe’s VIX, known as “Wall Street’s fear meter”, has risen more than 98 percent since the beginning of the year, according to MarketWatch.

The unrest has permeated bond markets, pushing yields on 10-year U.S. Treasury bonds to 3.185 percent on Monday, the highest level since November 2018. Bond yields are reversed from prices.

In Asia, markets closed sharply lower as the weight of China’s zero-tolerance covid restrictions continued to strain the region’s business activity. Hong Kong’s Hang Seng index fell 3.8 percent, while Japan’s Nikkei 225 fell 2.5 percent. The Shanghai Composite Index was almost flat.

“Continued influence of Beijing’s zero-Covid policy in China and concerns about the Fed’s next moves are helping to build up pressure on markets,” Russ Mold, director of investment at AJ Bell, said in an email to The Post on Monday. “The impact of Chinese restrictions has been reflected in export growth, which reached its lowest level in two years in April – in fact, where we were close to the start of the pandemic.”

European markets were in the red in all segments, with the Stoxx 600 benchmark falling 2 percent in noon trading, as did France’s CAC 40 and Britain’s FTSE 100.

Oil prices retreated somewhat after Japan became the last G-7 country to ban Russian oil imports. Brent oil, the international benchmark for oil, fell 2.5 percent to about $ 109.50. The West Texas Intermediate, the U.S. oil benchmark, fell 2.9 percent to about $ 106.50.

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