NEW YORK, Feb 10 — The dollar slid and a global equity rally lost steam yesterday as nagging concerns about the economy and the future pace of central bank interest rate hikes unsettled investors who earlier pushed European stocks to almost one-year peaks in Europe.
The market is confused as it thought it understood, despite the Fed’s rhetoric, that the US central bank was very close to ending its rate-hiking cycle, said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina. The gap between two — and 10-year yields US2US10=RR remained inverted at -82.3 bps, after steepening to -87.5 bps earlier in the session.
However, getting inflation down to the Fed’s 2 per cent target could easily take more than a year as energy prices may remain elevated, a fact making some in the market nervous, he said. On Wall Street, the Dow Jones Industrial Average .DJI fell 0.73 per cent, the S&P 500 .SPX lost 0.88 per cent and the Nasdaq Composite .IXIC dropped 1.02 per cent.