Nasdaq fell 2.2% and S&P 500 by 1%, while Bitcoin broke below $45K to touch lows of $43,500
Declines across the stock markets came amid Fed remarks and expected sanctions on Russia
US Federal Reserve officials see six more 0.25% interest rate hikes in 2022
US stocks were trading lower on Wednesday afternoon after posting fresh losses following Tuesday’s negative close.
The session’s declines saw the S&P 500 drop 1.5% before recouping some of the losses as of early afternoon trades (3:20 PM ET). The blue-chip index closed 1% lower.
Across the market, the Dow Jones Industrial Average was fell 0.4% while the Nasdaq Composite, weighed down by tech weakness, ended the day at -2.2%.
The US stock market mirrored action seen across European and Asian shares.
In Europe, Wednesday saw the pan-European Stoxx 600 close 1.5% lower, with Germany’s DAX and France’s CAC ending the session at -1.9% and -2.2% respectively. UK’s FTSE 100 also closed lower, declining 0.3%.
Asian shares also ended Wednesday’s session mainly in the red. Japan’s Nikkei fell 1.6%, Hong Kong’s Hang Seng index dropped 1.9% while Australia’s ASX closed -0.5%.
In bonds, the benchmark US 10-year Treasury yield was hovering around 2.6%.
Oil prices fell 5% to $96.85 per barrel, while gold gained slightly to reach $1,929 per ounce.
Amid the declines in stocks, Bitcoin (BTC-USD) also fell. The top cryptocurrency broke below key support at $45,000 and retested the area around $43,500.
Bitcoin remained weak through Wednesday, with the ‘digital gold’ tracking stocks as risk assets hit fresh downside volatility. BTC-USD was trading around $43,800, about 4% down in the past 24 hours.
Fed eyes 6 rate hikes in 2022
Sentiment across the equities market remained largely jittery even after US Federal Reserve released the minutes of its March 15-16 monetary policy meeting on Wednesday afternoon.
Fed officials largely hold a hawkish outlook for the market and are prepared to take an aggressive approach to rate hikes. For now, the market should expect six 0.25% rate hikes for 2022.
The central bank is also reportedly prepared to hasten the reduction of its balance, with economic and financial factors likely to inform how this happens going forward.
As well as the reaction to Fed officials’ comments and the language of the minutes, investors remain alert to potential market-moving developments around Russia.
This week, the investors are likely to fret over new sanctions on individuals and corporations. Something else to watch out for is the possible exit of foreign companies that still had operations in the country- more so after the storm over massacres in Bucha, that were blamed on Russian soldiers.