European stocks may open on a cautious note on Friday as investors weigh a range of uncertainties.
The dollar inched higher and yields on 10-year U.S. government bonds extend recent surge to hover near 5 percent for the first time since 2007 after Fed Chair Jerome Powell didn’t offer clarity on the rate outlook.
Middle East tensions looked set to escalate, with the U.S. State Department issuing a worldwide caution alert citing the “potential for terrorist attacks, demonstrations or violent actions against U.S. citizens and interests.”
On the 14th day of the Israel-Hamas conflict, Israel’s defense minister has asked the country’s military to prepare for potential entry into the Gaza Strip with the aim of dismantling the Palestinian militant group.
U.S. President Joe Biden said that he can’t let terrorists like ‘Hamas’ and tyrants like ‘Putin’ win. The United States has vetoed a UN-led ceasefire in the Middle East war.
Concerns over supply disruptions sent oil prices soaring, with both Brent and WTI contracts rising around 1 percent in Asian trade as the U.S. announced plans to replenish its strategic petroleum reserves.
Asian markets were deep in the red while gold hurtled toward the $2,000-an-ounce level on safe-haven buying.
Chicago Fed President Austan Goolsbee said he’s hopeful the U.S. can avoid a recession despite rapid and steep interest-rate hikes over the past 18 months.
U.S. stocks fluctuated before closing firmly in the red overnight and Treasury yields hit 16-year highs after Fed Chair Jerome Powell warned that inflation is “still too high” and additional monetary policy tightening may be needed.
Economic reports painted a mixed picture, with jobless claims falling to a nine-month low last week while a measure of existing home sales dropped to a 13-year low in September.
The Dow gave up 0.8 percent, the S&P 500 shed 0.9 percent and the tech-heavy Nasdaq Composite lost 1 percent.
European stocks hit a seven-month low on Thursday as a string of disappointing earnings updates added to worries over rising bond yields and the escalating Israel-Hamas war.
The pan European STOXX 600 fell 1.2 percent. The German DAX eased 0.3 percent, France’s CAC 40 slipped 0.6 percent and the U.K.’s FTSE 100 declined 1.2 percent.
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