Shares on Wall Street continued to slide on Tues. The US Labor Department released a report on wholesale prices, which showed inflation is hot.
The US Federal Reserve finishes its Dec meeting later today (Wed). Focus will be on how many rate increases will policymakers indicate for next year. Will the “dotplots” show two or three hikes?
The tech-heavy Nasdaq Composite led the declines on Tues, falling 1.14%. The S&P 500 Index slid 0.75%. The blue-chip Dow Jones Industrial Average fell 106.77 points, or 0.30%, to 35,544.18.
Software companies Adobe (ADBE US, -6.6%) Cloudflare (NET US, -8.9%) and Zscaler (ZS US, -7.8%) plunged after JPMorgan analysts issued a series of downgrades, citing high valuations.
Financials outperformed, perhaps on the prospect that they will benefit from higher interest rates. The SPDR S&P Regional Banking ETF (KRE US) rose 0.9%). Goldman Sachs (GS US) gained 1.1%.
Ahead of the Feed meeting, the 10 year US Treasury note yield rose 2.3 basis points (bps) to 1.439%.
Worries about rate hikes sent gold futures lower. The most actively traded US gold futures (Feb) contracts settled down $16.00, or 0.9%, at US$1,772.30/oz.
The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, rose 0.26% to 96.571.
The front-month Brent and WTI futures closed down 69 cents at US$73.70/bbl and 56 cents at US$70.73/bbl respectively.
European markets were down on Tues. France's CAC 40 fell 0.70%. The German DAX retreated 1.1%, while the UK FTSE lost 0.2%. London stocks were supported by a strong day for miners, with Rio Tinto PLC (RIO LN) rising 2.63% and BHP Group PLC (BHP LN) 2.33% better.