European stocks and U.S. stock futures fell early Thursday amid fears of a recession, a day after Federal Reserve Chairman Jerome Powell told Congress the central bank would continue to rise interest rates to fight inflation and acknowledged that a slowdown was a “possibility”.
The London Stock Exchange’s FTSE 100 fell more than 0.7% after markets opened on Thursday morning while the Frankfurt Stock Exchange’s DAX index was down 1.27%.
The pan-European Stoxx 600 index fell more than 1.1% an hour after markets opened.
However, stock markets in Asia appeared to be largely unperturbed, with Hong Kong’s Hang Seng index up 1.26% while the Tokyo Stock Exchange’s Nikkei 225 was up 0.08% at the close of trading. markets Thursday.
U.S. stock futures were also down in premarket trading early Thursday, with the benchmark S&P 500 index falling 0.2% while the Dow Jones index slid 0.36%.
Crude oil prices also fell, with global Brent Crude futures falling more than 2% and falling below $110 a barrel.
In testimony before Congress on Wednesday, Powell said the Federal Reserve is “firmly committed” to raising interest rates until the country’s high inflation rates normalize. Powell also admitted that the central bank’s aggressive rate hikes meant a recession was “certainly a possibility”. Powell’s statement to Congress came a week after the Federal Reserve raised interest rates by 75 basis points, the biggest hike since 1994. alarm among financial institutions, which warned of an impending recession later this year. the next 12 to 18 months. Powell, however, said the central bank was “not trying to cause a recession” and was instead simply focusing on bringing inflation down to a target rate of 2%, down from its current high of 41. years of 8.6%.
Powell says Fed will keep raising rates until there’s ‘hard evidence’ inflation is slowing (Forbes)