Monday August 22nd


Dow futures drop 300 points to start the week as Wall Street rally continues to fizzle

U.S. stock index futures fell Monday following a halt in the summer rally last week, as fears of aggressive interest rate hikes returned to Wall Street. Dow Jones Industrial Average futures fell 339 points, or by 1.01%. S&P 500 and Nasdaq 100 futures dropped 1.21% and 1.56%, respectively. Those moves come as European markets experienced steep declines, driven in part by worries of rising inflation and higher interest rates around the world. On Friday, the S&P 500 closed down 1.29%. The Dow Jones Industrial Average dropped 292 points, or 0.86%, and the Nasdaq Composite dropped 2.01%. The major averages also posted weekly losses. Investors are anticipating what could be a volatile week of trading ahead of Fed Chairman Jerome Powell’s latest comments on inflation at the central bank’s annual Jackson Hole economic symposium. “Fed Chair Powell is likely to sound meaningfully more hawkish during his Jackson Hole speech on Friday morning at 10am ET than he did at his July 27th press conference, when he said the fed funds rate is already back to neutral,” read a Monday report from Wolfe Research’s Chris Senyek. On the earnings front, traders are expecting Palo Alto Networks and Zoom Video to report results Monday after the bell. Shares in the Asia-Pacific region were mostly lower on Monday as concerns over aggressive Fed hikes reemerged, but Chinese markets rose after China cut its benchmark lending rates. The Shanghai Composite was 0.61% higher at 3,277.79, and the Shenzhen Component gained 1.19% to 12,505.68. China’s central bank cut its one-year benchmark lending rate by 5 basis points to 3.65% and its five-year rate by 15 basis points to 4.3%. Elsewhere in Asia, Hong Kong’s Hang Seng index was down 0.6% in the final hour of trade. The Nikkei 225 in Japan pared some losses but was down 0.47% at 28,794.5 and the Topix index slipped 0.1% to1,992.59. South Korea’s Kospi shed 1.21% to 2,462.5 and the Kosdaq lost 2.25% to 795.87. Oil prices slumped on Monday as investors were concerned that aggressive U.S. interest rate hikes might weaken the global economy and fuel demand while a stronger dollar also weighed. Brent crude futures for October settlement fell 27 cents, or 0.3%, to $96.45 a barrel. U.S. West Texas Intermediate (WTI) crude futures for September delivery, due to expire on Monday, were down 61 cents, or 0.7%, at $90.16 a barrel. The more active October contract was at $90.09, down 35 cents, or 0.4%. On Friday both Brent and WTI climbed for a third straight day, but fell about 1.5% on the week on a stronger dollar and demand concerns. Gold prices fell 1% on Monday to their lowest level in nearly four weeks, as expectations of more interest rate hikes by the U.S. Federal Reserve fueled a rally in dollar and took the shine off bullion. Spot gold fell 1.01% to $1,730.21per ounce, its lowest since July 27. It is set to fall for a sixth straight session, having registered a 3% fall last week. U.S. gold futures dropped 1.11% to $1,743.30.