The CME Group’s FedWatch now gives a 45.5% chance of a 75 basis point rate hike on Sept. 21, up from 41% in yesterday’s trading.
The comments, set against worrisome inflation levels in Europe, where prices rose 8.9% last month to a two-decade high, reminded investors that the post-pandemic economy faces numerous challenges.
One such challenge remains China, where officials have now warned of an impending drought, adding to a list of problems in the world’s second-largest economy that has sparked rumors of a rate cut by the Peoples’ Bank of China. .
The Chinese yuan was fixed at its lowest level in two years against the US dollar, while the dollar index rose 0.65% to 108.162 against a basket of six global peers.
Yields on 10-year bonds, which move in the opposite direction to prices, rose 8 basis points from yesterday to 2.978%, while 2-year bonds were tied at 3.244%.
European equities fell lower after a disturbing reading of factory inflation in Germany, the region’s largest economy, driven in part by a 105% year-on-year increase in energy input prices. The European Stoxx 600 benchmark fell 0.24% during afternoon trading in Frankfurt, following a 0.48% decline for the region-wide MSCI ex-Japan index in Asia.
On Wall Street, the S&P 500 finished 1.29% lower, while the Dow Jones Industrial Average fell 292 points, or 0.85%, to 33,706. The tech-focused Nasdaq lost 2%.
Bed, Bath & More
( shares plunged more than 40% after Securities and Exchange Commission filings late Thursday indicated that Ryan Cohen, the retailer’s second-largest shareholder, had completely exited his nearly 12% stake in the group. BBBY)
Deere & Co
( Shares ended slightly higher after the farm equipment maker posted a worse-than-expected third-quarter profit and lowered its full-year profit forecast amid continued supply chain pressure. THE)
( shares fell 3.36% after the semiconductor device maker posted better-than-expected third-quarter results and a solid, but cautious, near-term outlook. AMAT)
( shares lost 1.20% after the home improvement retailer unveiled a new $15 billion share repurchase program, kept the dividend in place and appointed new CEO Ted Decker as group chairman after stronger-than-expected second-quarter gains earlier this week. HD)