US open: Stocks fall as rate hike fears rise
US stocks fall as hawkish Fed fears are re-ignited following a week of stronger than forecast data and hawkish Fed comments.
Share this:
US futures
Dow futures -0.35% at 33580
S&P futures -0.55% at 4067
Nasdaq futures -0.72% at 12350
In Europe
FTSE -0.18% at 79994
Dax -0.65% at 15440
50 basis point rate hikes?
Stronger-than-expected data has continued into Thursday, sending futures lower ahead of the open.
US futures are heading lower in risk-off trade after hawkish comments from Fed and ECB officials, which have fuelled bets of higher interest rates for longer.
The sell-off in U.S. stocks comes after a 1% decline on Thursday after PPI came in hotter than expected and as Fed president Loretta Mester and James Bullard ramped up the hawkish rhetoric. Both policymakers were supportive of returning to 50 basis point hikes.
After an optimistic start to 2023, February is proving to be a much more troubling month for stocks. In light of the blowout jobs report, hotter than expected inflation, and a rebound in retail sales, the market is now starting to price in three more 25 basis point rate hikes over coming Fed meetings, up from a previously expected two more rate hikes.
With inflation proving to be stickier than expected, a terminal rate of 5.5%, is looking very plausible, which is up from expectations of a terminal rate of 5% at the start of the month.
The data is forcing the market to finally pay attention to what the Fed has been saying. That rates need to rise further and stay high for longer to rein in inflation, which is still too high.
Corporate news
Manchester United share prices rise to a record high on hopes that multiple bidders will battle to take over the club.
Door Dash right it's a 5% pre-market after the online food delivery company but reported robust Q4 growth and forecast strong future orders. it also announced a $750 million stock buyback.
Where next for the S&P500?
The S&P rebounded lower after hitting resistance at 4150 and is now looking to test support at 4050, last weeks’ low. A break below here, combined with a bearish crossover on the MACD, keeps sellers hopeful of further losses towards the 100 sma at just over 4000 and the 200 sma at 3944. On the flip side, should buyers successfully defend the 4050 level, the price could rise back up towards 4150 and 4175 the weekly high with a rise above here creating a higher high and opening the door to 4195 the February high.
FX markets – USD rises, GBP drops
The USD is rising, reaching a six-week high, boosted by bets that the Fed will raise interest rates higher and for longer in order to tame inflation, which is proving to be stickier than expected.
EUR/USD has fallen sharply to a six-week low on the back of the stronger you S dollar and as investors look past hawkish ECB comments. acb governing council member Isabel Schnabel says that she sees the risk of markets underestimating inflation and considers that the central bank may need to act more forcefully. she considers A50 basis point rate hike necessary in March under virtually all scenarios.
GBP/USD has fallen below 120 and is on track to lose 1% this week. stronger than expected retail sales have failed to boost the pound. Retail sales rose 0.5% MoM in January, after falling 1% in December, while beating forecasts of -0.3%. This week could have been a key week for providing direction for the March MPC meeting. However, the cooler than forecast inflation, strong wage growth and rising retail sales leaves us non-the wiser as to the BoE’s plan for monetary policy.
EUR/USD -0.38% at 1.0649
GBP/USD -0.41% at 1.1985
Oil on track for a weekly decline
Oil prices are falling for a sixth straight session and run track to lose just shy of 5% across the week, reversing some of last week’s 9% gains. Expectations that the Federal Reserve will tighten monetary policy further in order to rein in inflation has boosted the USD, making oil more expensive for buyers with foreign currency, and has raised concerns about an economic slowdown that could hit oil demand.
Oil has traded in a choppy manner across the first six weeks of this year as investors way up inflation and recession concerns against optimism surrounding a pickup in demand from China, the world’s largest oil importer.
China is expected to import a record amount of crude oil in 2023 as activity ramps up following the easing of Covid restrictions.
WTI crude trades -3.5% at $76.30
Brent trades at -2.8% at $85.06
Looking ahead
N/A
US futures
Dow futures -0.35% at 33580
S&P futures -0.55% at 4067
Nasdaq futures -0.72% at 12350
In Europe
FTSE -0.18% at 79994
Dax -0.65% at 15440
Learn more about trading indices
50 basis point rate hikes?
Stronger-than-expected data has continued into Thursday, sending futures lower ahead of the open.
US futures are heading lower in risk-off trade after hawkish comments from Fed and ECB officials, which have fuelled bets of higher interest rates for longer.
The sell-off in U.S. stocks comes after a 1% decline on Thursday after PPI came in hotter than expected and as Fed president Loretta Mester and James Bullard ramped up the hawkish rhetoric. Both policymakers were supportive of returning to 50 basis point hikes.
After an optimistic start to 2023, February is proving to be a much more troubling month for stocks. In light of the blowout jobs report, hotter than expected inflation, and a rebound in retail sales, the market is now starting to price in three more 25 basis point rate hikes over coming Fed meetings, up from a previously expected two more rate hikes.
With inflation proving to be stickier than expected, a terminal rate of 5.5%, is looking very plausible, which is up from expectations of a terminal rate of 5% at the start of the month.
The data is forcing the market to finally pay attention to what the Fed has been saying. That rates need to rise further and stay high for longer to rein in inflation, which is still too high.
Corporate news
Manchester United share prices rise to a record high on hopes that multiple bidders will battle to take over the club.
Door Dash right it's a 5% pre-market after the online food delivery company but reported robust Q4 growth and forecast strong future orders. it also announced a $750 million stock buyback.
Where next for the S&P500?
The S&P rebounded lower after hitting resistance at 4150 and is now looking to test support at 4050, last weeks’ low. A break below here, combined with a bearish crossover on the MACD, keeps sellers hopeful of further losses towards the 100 sma at just over 4000 and the 200 sma at 3944. On the flip side, should buyers successfully defend the 4050 level, the price could rise back up towards 4150 and 4175 the weekly high with a rise above here creating a higher high and opening the door to 4195 the February high.
FX markets – USD rises, GBP drops
The USD is rising, reaching a six-week high, boosted by bets that the Fed will raise interest rates higher and for longer in order to tame inflation, which is proving to be stickier than expected.
EUR/USD has fallen sharply to a six-week low on the back of the stronger you S dollar and as investors look past hawkish ECB comments. acb governing council member Isabel Schnabel says that she sees the risk of markets underestimating inflation and considers that the central bank may need to act more forcefully. she considers A50 basis point rate hike necessary in March under virtually all scenarios.
GBP/USD has fallen below 120 and is on track to lose 1% this week. stronger than expected retail sales have failed to boost the pound. Retail sales rose 0.5% MoM in January, after falling 1% in December, while beating forecasts of -0.3%. This week could have been a key week for providing direction for the March MPC meeting. However, the cooler than forecast inflation, strong wage growth and rising retail sales leaves us non-the wiser as to the BoE’s plan for monetary policy.
EUR/USD -0.38% at 1.0649
GBP/USD -0.41% at 1.1985
Oil on track for a weekly decline
Oil prices are falling for a sixth straight session and run track to lose just shy of 5% across the week, reversing some of last week’s 9% gains. Expectations that the Federal Reserve will tighten monetary policy further in order to rein in inflation has boosted the USD, making oil more expensive for buyers with foreign currency, and has raised concerns about an economic slowdown that could hit oil demand.
Oil has traded in a choppy manner across the first six weeks of this year as investors way up inflation and recession concerns against optimism surrounding a pickup in demand from China, the world’s largest oil importer.
China is expected to import a record amount of crude oil in 2023 as activity ramps up following the easing of Covid restrictions.
WTI crude trades -3.5% at $76.30
Brent trades at -2.8% at $85.06
Learn more about trading oil here.
Looking ahead
N/A
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Gold forecast: Rising yields become too hot for gold, but the outlook is far from bearish
Gold and silver prices took a plunge today, with the former down 3% and the latter falling some 5% by mid European session, before bouncing off their lows. The losses come after the metals remained largely supported until last week, despite the big dollar rally and surging bond yields as we have seen in recent weeks. But it simply got too much, and the metals succumbed to pressure today.
AUD/USD forecast: Currency Pair of the Week | September 28, 2026
The week has started with stocks, gold, silver and bitcoin all falling, as crude oil rebounded and bond yields pushed further higher. Trump refusing to agree to Tehran’s proposal to re-open the Strait of Hormuz has left the markets disappointed. Still, reports that mediators are expected to hold talks with the two sides on an amended version of the 7-day proposal that Iran presented, keeps hopes alive that we may see some progress.
Gold Outlook: XAU/USD hit hard as US yields, dollar resume ascent
A stronger dollar, surging front-end yields and renewed geopolitical tension have combined to push gold back towards key technical support.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.