Precise Investors Editorial Team
MSCI’s gauge of stocks across the globe shed 3.21 points, or 0.33%, to 978.95
MSCI’s global equities gauge dropped on Wednesday while gold prices slid, as investors digested comments from U.S. Federal Reserve Chair Jerome Powell about when the central bank might next cut U.S. interest rates.
Earlier, the pan-European STOXX 600 index closed down 0.19%. In contrast, European defence stocks closed 1.5% higher.
MSCI’s gauge of stocks across the globe shed 3.21 points, or 0.33%, to 978.95.
Gold prices eased from the previous session’s record highs as the U.S. dollar firmed while investors waited for the upcoming economic data releases, seeking further cues on the Fed’s policy path.
Spot gold dropped 0.86% to $3,731.62 an ounce.
In currencies, the U.S. dollar gained against the yen, the Swiss franc and the euro after struck a cautious tone, while the New Zealand dollar dropped following the appointment of a new central bank chief.
The dollar index, which measures the greenback against a range of currencies including the yen and the euro, gained 0.66% to 97.87.
The euro was down 0.66% at $1.1737 while against the yen, the dollar strengthened 0.83% to 148.85. Against the Swiss franc, the dollar firmed 0.54% to 0.795.
U.S. central bank Chair Powell on Tuesday underlined the need for policymakers to balance the competing risks of high inflation and a weaker jobs market in their next monetary policy decisions.
Traders were still pricing in a rate cut in October, according to CME Group’s FedWatch tool.
Despite a fairly quiet day in terms of major directional market drivers, equities have trended lower on anxiety over whether or not the Fed cuts rates at each meeting for the balance of this year, said Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, California. He pointed to Powell’s comments along with economic data released on Wednesday and anxiety ahead of an inflation reading due Friday.
Wednesday’s data showed sales of new U.S. single-family homes surged in August by 20.5% to a seasonally adjusted annualized rate of 800,000 units.
The stronger-than-expected housing market data could suggest an economy where the Fed would not need to cut rates, Goldman said.
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