- Stocks fell as Federal Reserve officials emphasized that more rate hikes are on the way, with risk appetite also dampened by concerns about China's trade restrictions and their impact on the global economy.
- The S&P 500's monthly gain was cut in half as Fed Bank of St. Louis President James Bullard said markets may be underestimating the likelihood of higher interest rates, while his New York counterpart John Williams said policymakers have more work to do to curb inflation. According to Fed Vice Chair Lael Brainard, a string of supply shocks is keeping inflation risks elevated.
- Investors are now anticipating Jerome Powell's speech on Wednesday, with many economists expecting him to solidify bets that the Fed will slow its pace of rate increases next month – while reminding Americans that the fight against inflation will last until 2023
- The dollar rose alongside the Japanese yen as traders sought safety. Investor jitters also hit bitcoin, as the crypto market digested the bankruptcy filing of Blockfi. Chinese stocks listed in the United States have recovered from a selloff. Apple (AAPL) fell after Bloomberg News reported that unrest in China will result in a production shortfall of nearly 6 million iPhone Pro units this year.
- China's woes complicate expectations for the country's reopening, with authorities deploying a heavy police presence in Beijing and Shanghai to prevent a repeat of the weekend's protests. Goldman Sachs Group analysts have warned that the chances of a messy exit from the covid zero policy are increasing.
