Stocks sank as Federal Reserve officials stressed that more rate hikes are coming, with risk appetite also hit by uncertainties around China’s Covid curbs and their impact on the global economy.
“We expect Powell will push back more narrowly on market bets on early rate cuts that have once again crept a bit too far into 23, emphasizing that a stronger-for-longer labor market suggests that rates will need to be higher for longer,” wrote Krishna Guha, vice chairman of Evercore ISI. “This is going to keep economic activity subdued in the country, and beyond,” said Fawad Razaqzada, market analyst at City Index and Forex.com. “The civil unrest is adding another layer of uncertainty over the economic situation there. It is certainly hurting investor sentiment across the financial markets.”