Global stock prices fell on Tuesday, oil prices fell and the US dollar rose after US Federal Reserve Chairman Jerome Powell warned that the US central bank may step up interest rate hikes to curb inflation.
Investors had been waiting for signals about when the FRS might pause its rate hike cycle. However, Powell said the US central bank “will be ready to increase the pace of rate hikes” after good economic data.
The FRS and other central banks around the world have been raising interest rates in an attempt to curb the highest inflation in decades, but these policies could also lead to economic recession.
“There was a big sigh of disappointment in the stock market as investors realized once again that the FRS’s job of trying to curb inflation in the US is far from over,” said Suzanne Streeter, head of money and markets at Hargreaves Lansdown.
The US dollar rose against the British pound, the euro and the Japanese yen as higher interest rates make the US currency more attractive to investors.
Oil prices, which are denominated in dollars, fell by more than 3%, partly in response to the strengthening of the US dollar.
The Dow Jones Industrial Average fell 1.7% to 32,856.46 on Tuesday, the Standard & Poor’s 500 fell 1.5% to 3,986.37, and the Nasdaq Composite fell 1.3% to 11,530.33 points.
London’s FTSE 100 fell 0.1% to 7,919.48 on Tuesday, Frankfurt’s DAX 30 fell 0.6% to 15,559.53 and Paris’ CAC 40 fell 0.5% to 7,339. ,27 points.
WTI crude fell 3.6% to $77.58 a barrel in electronic trading on the New York Stock Exchange on Tuesday. The price of “Brent” crude oil on the London Stock Exchange decreased by 3.4% to 83.29 dollars per barrel.
On the Dutch exchange “Title Transfer Facility” (TTF), the price of natural gas rose by 2.90% to 43.37 euros per megawatt hour on Tuesday.
The euro fell from $1.0681 to $1.0552 per euro on Tuesday, the British pound fell from $1.2025 to $1.1827 per pound, and the dollar rose against the Japanese yen from 135.93 to 137.13 yen per dollar. The euro rose against the British pound from 88.82 to 89.19 pence per euro.
