Investors appear to be pricing in higher odds of a Fed rate hike in June or July, weighing on business investment and lending activity. According to FOMC member William Dudley, the June meeting will definitely be a live one, which suggests that the possibility of tightening is very much on the table. FOMC member Fischer echoed this view while Fed official Lacker even noted that he supported an April hike.
The Dow 30 index slid 91.22 points to 17,435.40 (-0.52%), the S&P 500 index fell 7.59 points to 2,040.04 (-0.37%), and the Nasdaq dropped 26.59 points to 4,712.53 (-0.56%). The S&P 500 VIX, which is considered a gauge of market uncertainty, rose 0.38 points to 16.33 (+2.38%).
Data from the US economy was mixed, as the Philly Fed index showed a sharper contraction for April instead of the projected return to industry expansion. Initial jobless claims came in close to expectations while the CB leading index showed a larger 0.6% uptick than expected.
Euro zone equities retreat on dovish ECB minutes
The European Central Bank released the minutes of their latest monetary policy meeting and didn’t surprise investors with their dovish bias. Still, the German DAX slid 147.34 points to 9,795.89 (-1.48%), the French CAC 40 fell 36.76 points to 4,282.54 (-0.85%), and the Euro Stoxx 50 dropped 34.03 points to 2,922.40 (-1.15%).
In the United Kingdom, the stock market shrugged off stronger than expected UK retail sales. The report showed a 1.3% jump in consumer spending for April, more than twice as much as the expected 0.6% gain, while the previous reading was upgraded to show a smaller 0.5% dip. The FTSE 100 fell 112.45 points to 6,053.35 (-1.82%).
Asian equities staying afloat
Asian markets are in the green so far, as traders are likely booking profits ahead of the weekend. The Nikkei 225 index is up 30.99 points to 16,677.65 (+0.19%), the China A50 index is up 12.74 points to 9,353.21 (+0.13%), and the S&P ASX 200 is up 29.96 points to 5,353.30 (+0.56%).
New Zealand reported a 1.1% decline in visitor arrivals for April, likely weighing on tourism revenues for the month, but posted an impressive 9.1% jump in credit card spending for the same period. Up ahead, Canadian CPI and retail sales figures are on deck, with traders expecting notable declines in consumer spending for March. G7 meetings are taking place over the weekend.
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