Monday August 29th


Dow futures slide 200 points, building on last week’s sharp sell-off

U.S. stock index futures fell Monday as worries over rising rates and tighter monetary policy added fuel to a rout that began in the previous session. Futures for the Dow Jones Industrial Average slid 208 points, or about 0.6%. Those for the S&P 500 and the Nasdaq 100 dropped 0.7% and 0.8%, respectively. Wall Street was suffered a sharp sell-off on Friday, when Federal Reserve Chairman Jerome Powell’s short and blunt remarks in Jackson Hole, Wyoming, appeared to extinguish hopes of the central bank changing its aggressive course of rate hikes in the months ahead. The Dow fell 1,008 points, or just over 3%, for its worst day since May. The S&P 500 and Nasdaq Composite fell 3.4% and 3.9%, respectively, for their worst days since June. The drop erased the August gains for all three averages. “Investors again cut back on their recent Risk-On positioning, supporting our view that it is way too soon to call their recent risk appetite a more permanent stance, and now one more likely to have cost them badly,” Rick Bensignor of Bensignor Investment Strategies said in a note to clients. Meanwhile in Europe over the weekend, European Central Bank board member Isabel Schnabel warned that central banks must continue to fight inflation — even if it tips economies into recession. The coming week brings more Fed speeches, including Vice Chair Lael Brainard on Tuesday, before August’s nonfarm payrolls report on Friday. Tech stocks were set to lead early losses Monday, as U.S. Treasury yields rose after Fed Chair Powell signaled further interest rate hikes Friday. Meta Platforms, Amazon and Apple were each down more than 1% in premarket trading, while Microsoft, Alphabet, Netflix and Twitter slipped nearly 1%. Salesforce lost about 1.6% in early trading. Shares in the Asia-Pacific traded lower on Monday following Fed Chairman Jerome Powell’s speech at Jackson Hole on Friday. He warned that rising interest rates will cause “some pain” to the U.S. economy, saying higher interest rates likely will persist “for some time.” The Nikkei 225 in Japan slipped 2.66% to 27,878.96 and the Topix index declined 1.79% to 1,944.10. South Korea’s Kospi fell 2.18% to 2,426.89 and the Kosdaq index dropped 2.81% to 779.89. Mainland China’s Shanghai Composite rose 0.14% to 3,240.73, and the Shenzhen Component lost 0.34% to 12,018.16. Hong Kong’s Hang Seng index was 0.76% lower in the final hour of trade and the Hang Seng Tech index dropped 1.36%. Oil rose Monday as potential OPEC+ output cuts and conflict in Libya helped to offset a strong U.S. dollar and a dire outlook for U.S. growth. Saudi Arabia, de facto leader of the Organization of the Petroleum Exporting Countries (OPEC) last week raised the possibility of production cuts, which sources said could coincide with a boost in supply from Iran should it clinch a nuclear deal with the West. Brent crude rose 21 cents to $101.20 a barrel, extending last week’s 4.4% gain. U.S. West Texas Intermediate (WTI) crude was up 48 cents at $93.54 after rising by 2.5% last week. Gold prices took a beating on Monday as U.S. Federal Reserve Chair Jerome Powell acknowledged that a quick undo of the U.S. central bank’s rate tightening was far from over, which boosted the dollar and sent bullion to a one-month low. Spot gold was down 0.56% at $1,727.22 per ounce, after hitting its lowest since July 27 at $1,719.56 earlier in the session. U.S. gold futures dropped 0.65% to $1,738.4.