More losses ahead for Wall Street
U.S. stock futures were trading sharply lower on Monday as inflation concerns spread across the globe, following a red-hot U.S. CPI reading.
As of 5:50 a.m. ET, futures tied to the blue-chip Dow sank 607 points, or 1.93% to 30,781. S&P 500 futures lost 94.75 points, or 2.43% to 3,804.25 while the tech-focused Nasdaq 100 futures plummeted 363.5 points, or 3.07% to 11,476.50.
Data released by the Labor Department on Friday showed U.S. consumer price index shot to a fresh 40-year high of 8.6% in May, sparking fears that Federal Reserve policymakers will be forced to announce even more aggressive rate hikes to battle surging consumer prices.
On Friday, the Dow gave away 880 points, or 2.73%, to close at 31,393. The S&P 500 dropped 117 points, or 2.91%, to end at 3901, while the Nasdaq Composite declined 414 points, or 3.52%, to finish at 11,340.
Fed to begin its two-day policy meeting tomorrow
Meanwhile, the Fed will kick off its latest two-day policy meeting on Tuesday after the substantially higher-than-anticipated U.S. inflation report on Friday.
The central bank is now expected to announce a 50 bps interest rate hike at the conclusion of the meeting on Wednesday.
Some economists also believe it is likely to announce a 75 bps hike. Currently, the Fed’s benchmark interest rate is in the range of 0.75% – 1%.
The Fed will release a policy statement and updated economic projections at 2 p.m. ET on Wednesday. Fed boss Jerome Powell will hold a press briefing at 2:30 p.m. ET.
Bitcoin sinks below $24,000
On the crypto front, the price of bitcoin has dipped to its lowest mark in about 18 months, as traders continue to dump risk assets following Friday’s shock U.S. CPI data.
Traders were also spooked by crypto lender Celsius Network’s decision to pauses all withdrawals, swap, and transfers between accounts on the platform.
Celsius announced that customers would be temporarily unable to withdraw funds from the platform, due to “extreme market conditions.”
As of writing, bitcoin was down 13.62% to $23,751 on Monday, its lowest since December 2020.
Several major cryptocurrencies, including Ethereum, Dogecoin, Solana, and Cardano suffered even heavier losses compared to bitcoin, dropping by between 15%-19% early Monday morning.