Global Stocks Fall Ahead of Fed Interest Rate Decision

Global stocks were mostly lower on Wednesday, as investors anticipate the Federal Reserve’s interest rate decision due later in the day.

Markets are preparing for what could be the central bank’s first likely rate hike decision in 2018, as well as clues on how many more to expect for this year under new Fed chairman Jerome Powell.

Investors were quite certain that Fed will raise rates from 1.5 percent to 1.75 percent, while policymakers are widely expecting three or four other rate hikes for the year, which might prompt a bond and equity selloff.

An increase would mark the Fed’s sixth increase of borrowing costs ever since it started tightening monetary policy in 2015, after a time of almost zero interest rates as a result of the financial crisis in 2008.

Concerns over the impact of US tariffs on global trade also had investors on edge. China was reportedly planning to counter US President Donald Trump’s import requirements, including tariffs on US agricultural exports from farm belt states.

Sources familiar with the matter said the Trump administration is expected to reveal up to $60 billion in new tariffs on Chinese imports by Friday.

Futures on the S&P 500 index traded 0.03 percent lower to $2,716.08, while Dow Jones Industrial Average (DJI) was up by 0.04 percent to $24,736.56.  

European Stocks

Indexes in Europe traded in a negative territory, as investors stayed on the sidelines ahead of the Fed meeting.

The pan-European STOXX 600 declined by 0.2 percent to $374.78, while the Euro Stoxx 50 fell by 0.3 percent to €3,404.50.

Germany’s DAX was down 0.1 percent to €12,294.10, while a stronger pound weighed on the UK’s 

FTSE 100, losing 0.4 percent to £7,027.75, its lowest in 15 months. The sterling added 0.3 percent to 1.4055 against the US dollar.

France’s CAC 40 slipped 0.3 percent to €5,234.16, whereas Italy’s FTSE MIB shed 0.1 percent to €22,779.50.

Asian Stocks

Asian stocks also retreated from earlier gains on Wednesday, with MSCI's broadest index of Asia-Pacific shares, excluding Japan, dropping 0.1 percent to $583.69, while Japan’s Nikkei 225 was closed for a public holiday.    

Hong Kong’s Hang Seng index closed down 0.4 percent lower to HK$31,414.52. The Shanghai Composite declined 0.2 percent to CN¥3,280.95, while Shenzhen Composite slipped 0.7 percent to CN¥1,858.61.

South Korea’s KOSPI edged lower by 0.02 percent to ₩2,484.97, whereas Australia’s S&P/ASX 200 added 0.2 percent to A$5,950.30.

HQBroker is here to give you a daily news roundup about the forex, commodities, technologies, automobiles, and economies. You can open an account now and make yourself updated with essential news in the market. Share your thoughts and experiences with us by commenting your HQBroker reviews.