Stocks slide into Fed mode, shorts stalk banks
Asian stocks fell for a second session in a row on Wednesday, as global investors contended with signs of a softening U.S. economy, and were in full flight from U.S. regional lenders, ahead of an expected U.S. interest rate hike later in the day.
Trade was thinned by holidays in China and Japan, though markets in Hong Kong were open and MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dropped 0.7%.
Overnight, tumbling regional bank stocks (.KRX) dragged the S&P 500 (.SPX) down 1.2% and oil dived more than 5% on fears that shaky bank confidence and signs of weakness in the U.S. job market were harbingers of a looming broader slowdown.
Bonds rallied as investors reckoned the Federal Reserve, which sets policy later on Wednesday, will soon be switching from rate hikes to cuts. The dollar, which fell a little, was caught in the crosswinds of falling yields and rising nerves.
Gold jumped nearly 2% to a three-week high above $2,000 an ounce.
This report’s information was first seen on REUTERS; to read more, click this link.