Following a wave of rate hikes from central banks this week, stocks fell and the dollar rose, with the Federal Reserve and the European Central Bank warning of more pain to come.

- the S&P 500 fell more than 2%, closing at its lowest level in more than a month. The Nasdaq 100, which is heavy on technology, fell more than 3%. stocks in Europe also closed Thursday lower after the ECB's upward revision to 2024 inflation projections.

Oil's three-day rally came to an end. Commodities ranging from oil to copper were under pressure as concerns about a global economic slowdown and dwindling demand grew. The dollar rose to its highest level since September as investors sought safe-haven assets.

While the Fed and the ECB slowed the pace of their rate hikes, Powell and ECB President Christine Lagarde emphasised their determination to fight inflation. This disappointed investors, who had hoped for a more dovish tone.

Since Fed Chair Jerome Powell reiterated his hawkish stance on Wednesday and policymakers signalled a peak rate that was higher than market expectations, risk assets have been under pressure. The European Central Bank and the Bank of England were among the major central banks to follow suit with half-point increases. The BoE's decision to slow the pace of monetary tightening was interpreted as a sign that interest rates may peak at a lower level than expected.

Traders are also digesting a slew of US data released on Thursday, which show the economy cooling even as the labour market remains strong. softening in the labour market remains a big target for the Fed.