- Stocks and bonds fell on Monday as investors focused on inflation and the impact of central bank policy tightening.
- All major groups in the S&P 500 fell, while the tech-heavy Nasdaq 100 fell more than 2%. Ten-year treasury yields surpassed 2.75% for the first time since March 2019 after the Federal Reserve signalled sharp rate hikes and balance-sheet reductions to combat price pressures last week.
- Oil fell as China's largest coronavirus outbreak in two years raised demand concerns.
- Bitcoin was trading around $40,000.
- A hawkish Fed, commodity disruptions caused by Russia's invasion of Ukraine, and the prospect of an economic slowdown continue to shape market sentiment. Despite an extended lockdown of Shanghai's 25 million people, China's COVID-19 outbreak continues to spread, putting global supply chains under strain. This month's earnings reports are expected to restore investor confidence in the stock market's outlook.
- Charles Evans, president of the Federal Reserve Bank of Chicago and a long-time dovish policymaker in the United States, said an accelerated pace of rate hikes to combat inflation is worth debating. The central bank is doing everything possible to avoid "collateral damage" from raising interest rates, which governor Christopher Waller described as a "brute-force tool" that can act as a "hammer" on the economy.
- Russia has stated that it will halt bond sales for the remainder of the year and take legal action if sanctions force it into a sovereign default.
