MSCI’s gauge of global stocks dropped 7.47 points, or 0.90%, to 823.78
Global equity indexes mostly dropped on Wednesday as possible U.S. trade curbs on chip equipment pulled tech stocks down, while Treasury yields and the dollar both reached four-month lows as Fed officials hinted the central bank was getting closer to reducing interest rates.
The Japanese yen gained sharply, in a move suspected to be the result of the latest in a series of interventions from Tokyo to boost the long-depressed currency.
A U.S. interest rate cut by September is seen as having a 98% probability, as per CME Group’s FedWatch tool. Lowering rates is generally seen as a way to stoke economic growth.
We are hearing a choral change in Fed speakers preparing the markets for a rate cut beginning in the later part of the third quarter, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Among the comments, Fed Governor Christopher Waller and New York Fed President John Williams both noted the shortening horizon toward looser monetary policy.
The benchmark S&P 500 equity index shed 78.93 points, or 1.39%, to 5,588.27 and the tech-heavy Nasdaq Composite declined 512.41 points, or 2.77%, to 17,996.93.
The Dow closed higher on Wednesday and hit its third consecutive record closing high.
Chipmaker stocks plunged on a report that the US is mulling restricting imports of technology to China, coupled with Republican presidential candidate Donald Trump saying key production hub Taiwan should pay the U.S. for its defence.
MSCI’s gauge of global stocks dropped 7.47 points, or 0.90%, to 823.78.
Shares of AI chipmaker Nvidia, dropped more than 6% after a rocky Asian session for Taiwan’s TSMC, which ended 2.4% lower.
Investors earlier this week had formed a cautiously optimistic view of a second U.S. presidency for Trump, who is running against incumbent Democrat Joe Biden.
Many strategists have suggested Trump is bullish for equities, and I’m just not sure about that, said Benjamin Melman, global CIO at Edmond de Rothschild Asset Management.
