Traders suddenly turn bearish before jobs day, and there’s a more hawkish ECB to contend with.
Markets staged a cataclysmic about-face on Thursday after the Federal Reserve meeting, frightened that inflation will spiral out of hand even with central banks raising policy rates and signaling more hikes. The S&P 500 Index lost 3.6%, erasing about $1.3 trillion of market value, and the tech-heavy Nasdaq 100 dropped 5.1%, the most since September 2020. This year is shaping up to be the most painful for dip buyers in decades. Ten-year Treasury yields finally pushed above 3% while the dollar powered ahead as the haven of choice. U.S. equity futures continued their decline today, with S&P 500 contracts down 0.4% as of 5:35 a.m. New York time. European stocks dropped more than 1%, set for the worst weekly drop in two months.