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Wall Street futures fell on Thursday as investors worried about the prospect of long-term high U.S. interest rates ahead of a series of speeches from Federal Reserve policymakers.
Contracts tied to Wall Street’s benchmark S&P 500 index fell 0.3%, while contracts tied to the tech-heavy Nasdaq 100 index fell 0.7% in early New York trading.
The decline follows Wednesday’s survey showing the U.S. services sector unexpectedly expanded in August as consumers continued spending even as the federal funds rate rose to a 22-year high. It is something that The news heightened investors’ doubts about when the U.S. Federal Reserve would start lowering interest rates.
Chief Quantitative Strategist Karl Steiner said the data shows that “even if the Fed ends its rate hikes, it will need to keep key interest rates in place for a longer period of time than previously expected if the economy remains this strong.” “This confirms the idea that there may be,” said Karl Steiner, chief quantitative strategist. At SEB Research. Traders will now be watching for comments from several Fed policymakers scheduled to speak later in the day.
The dollar, which tends to rise as investors expect U.S. interest rates to rise, rose 0.1% against a basket of six currencies on Thursday, staying near its highest since March.
Meanwhile, European stocks reversed early losses on Thursday following a sixth straight session of declines as concerns about an impending global economic slowdown moved investors into defensive sectors.
The region-wide Stoxx Europe 600 index was on track for its longest losing streak in more than five years earlier in the day, but had erased losses and traded sideways by the lunch break. France’s Cac 40 rose 0.3% and Germany’s Dax rose 0.1%.
Markets in the region tend to be less sensitive to business cycles and are believed to provide greater comfort to investors during downturns, with the utilities and healthcare sectors rising 0.9% and 0.5% respectively. , supported this.
A series of gloomy economic data from Europe and China has raised traders’ fears that the global economy is slowing as a result of high interest rates and weaker demand. Thursday’s figures showed Germany’s industrial production fell more than expected.
China’s CSI300 index fell 1.4% and Hong Kong’s Hang Seng index fell 1.3% after new figures on Thursday showed trade weakness in the world’s second-largest economy.
The statistics showed that China’s exports in August fell 8.8% from a year earlier, while imports fell 7.3% in a sign of slowing domestic and international demand.
Kelvin Lam, senior China economist at Pantheon Macroeconomics, said: “Prolonged inflation has depressed real wages in Western countries, while rising interest rates have reduced purchasing power by increasing debt servicing costs.” Ta.
“This, coupled with the drop in spending post-COVID-19, [is] As a result, demand for discretionary Chinese products has weakened,” he added.
Oil prices fell slightly as concerns about slowing demand from China, the world’s biggest importer of fossil fuels, overshadowed earlier supply cut announcements by Saudi Arabia and Russia.
Brent crude oil fell 0.5% to trade at $90.17 per barrel, still near its highest price this year, while its U.S. equivalent, West Texas Intermediate, fell 0.6% to $90.17 per barrel. It became $87.02.