Stocks And Crypto Were In Red, Oil Prices Lost, Metals Stayed Firm Ahead Of The Fed’s September Rate Hike Decision. The Dollar Climbed High, But Weakened Against The Krona.Updated time: 22 Sep, 2022, 13:15 (UTC+04:00)
Wall Street reversed into red territory on concerns that September’s super-sized 75 bps rate hike brought further evidence of the inflation impact on corporate America. Not to mention the Fed’s persisted aggressive tightening, the more inverted yield curve also renewed fears of a recession that follows in 1-2 years. The S&P 500 plummeted 1.13%, followed by Dow Jones and Nasdaq with 1.01% and 0.95% loss respectively. The mixed bag of data sent the market into confusion, requiring further focus on next economic projections, and dot plot estimates for clearer picture, especially after the building permits dropped by 10%.
Oil prices further retreated as investors worried the fifth aggressive hike would dampen crude demand besides signs of a potential gas inventories build. Both Brent crude futures and WTI crude futures fell more than 1% each, settling at $90.37 and $83.73 per barrel respectively. The stronger dollar has made oil more expensive to consume for major importers, while a slowdown in U.S road travel dumped gas demand. However, a harsh European winter and forthcoming sanctions on Russian oil may support prices.
Gold and copper are range bound ahead of the Fed meeting.
The U.S dollar crowned with a two-decade high amid a fully priced 75 bps hike from the Fed packed with central bank meetings. The dollar index last rose 0.5% at 110.10, beating many peers except the krona as Sweden's central bank adopted a 100 bps hike. The euro, at first weakened against the krona, managed to climb to 10.8808 but dropped to $0.9966. Sterling fell to $1.1385.
Major cryptos plunged in tandem with stocks. Risk aversion among Bitcon traders ran wild, sending the coin to $19,000 while Ethereum changed hands lower under $1,350. Other altcoins were unsteadily in red.