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Global stocks slide after Wall Street frets about the Fed

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By Laura He and Jill Disis, CNN Business

Global stocks and cryptocurrencies are pulling back on Monday as investors continue to weigh signals from the Federal Reserve that it could raise interest rates sooner than expected.

Markets were broadly lower, with Japan’s Nikkei 225 dropping more than 3% — easily the worst major performer — after Wall Street closed out its worst week in months on Friday with a 1.6% fall on the Dow Jones Industrial Average.

Hong Kong’s Hang Seng fell 1.1% and South Korea’s Kospi dropped 0.8%. China’s Shanghai Composite was the regional outlier in Asia, up 0.1%.

The fallout spilled over into Europe, where London’s FTSE 100 dropped 0.1%. France’s CAC 40 fell 0.2%, while Germany’s DAX was up 0.2%.

The declines followed volatility in the United States on Friday, where the Dow’s weak close left it 3.5% lower on the week, its worst pullback since late January. The S&P 500 lost 1.3% on Friday, while the Nasdaq Composite shed 0.9%.

US futures were muted early Monday, experiencing little change.

Wall Street was already having a rough week, but stocks slid even further on Friday after St. Louis Federal Reserve President James Bullard told CNBC that he thinks the Fed should raise interest rates as soon as the end of next year. That was even more hawkish than the signal the Fed sent out on Wednesday that it may raise rates twice by late 2023.

Wall Street is worried about inflation. But investors are also nervous about the Fed taking away the stimulus it is injecting into the market to counter the economic impact of the Covid-19 pandemic.

The crypto market is also struggling Monday, though it wasn’t immediately apparent why. Bitcoin is down more than 6% in the last 24 hours, trading just above $33,000 per coin, according to CoinDesk. Ethereum fell more than 7%, while dogecoin plunged more than 8%.

— Paul R. La Monica and Julia Horowitz contributed to this article.

CNN Newsource

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