Dow futures fell more than 200 points after the US Federal Reserve (Fed) signaled it was raising interest rates to curb inflation.
At 7:53 PM Thai time, the Dow Jones Industrial Average fell 212 points or 0.65% to 31,966 points.
The market was also put under pressure by the strong dollar. and the rebound in US government bond yields
The strength of the dollar has raised investor fears that it will affect the profits of listed companies with overseas earnings. The rise of 10-year US Treasuries, which are US government bonds used as a benchmark for global bond prices. This includes the US mortgage interest rate. it will cause consumers to have less money to spend while the cost of paying off mortgages increases AND companies will face higher costs for paying off debt. forcing these companies to reduce their investments and reduce dividend payments to investors
The Fed held its monetary policy meeting yesterday. with the resolution to raise the interest rate by 0.75% as expected by the market E signaled that the Fed will raise interest rates by only 0.50% in December.
However, Fed Chairman Jerome Powell expressed his determination to continue raising interest rates to curb inflation.
Powell’s remarks prompted investors to expect the Fed’s rate hike cycle to be longer than expected. Markets have raised expectations for the Fed’s interest rate cap to 5% or more next year. from previous forecast to 4.50-4.75%
Investors are keeping an eye on the number of non-farm payrolls tomorrow. While analysts had predicted the number of jobs added only 205,000 in October. after adding 263,000 jobs in September
