Stocks Lurch Lower; Dollar Edges Down After Gains: Markets Wrap

(Bloomberg) -- Asian stocks and European futures fell as warnings from the Federal Reserve on the need for more stimulus injected fresh jitters into an already weak September for global equities. The dollar pared its recent runup, though remains on course for the strongest week since April.South Korea, Hong Kong and Australia saw the biggest declines. S&P 500 futures fluctuated. The U.S. equities gauge earlier dropped to an eight-week low, with losses from its recent high now almost 10%. Fed Chairman Jerome Powell reiterated there’s a long way to go for the economic rebound, which will likely require more support. The urgent need for further fiscal stimulus was also stressed by other Fed officials. Treasuries were little changed. The offshore yuan ticked up after the daily currency fixing.The caution comes as virus cases tick higher in the U.S. and surge in other nations. Some European countries have resorted to more social distancing, rattling investors. Traders are losing faith in the strength of the economic recovery, with the chances for Congressional stimulus withering ahead of a contentious U.S. election. Global equities are on course for the first monthly slide since March, with the MSCI gauge down more than 5% in September.“Markets are digesting and grappling with this idea that the growth expectations that investors have might not materialize,” said Lauren Goodwin, economist and multi-asset portfolio strategist at New York Life Investments. “As the fiscal impulse in the U.S. starts to wane, some of these expectations for a slow and steady recovery are shaken.”Elsewhere, crude oil retreated, while gold edged higher.These are some events to watch this week:Powell and Treasury Secretary Steven Mnuchin will testify before a Senate committee on the economic response to the pandemic on Thursday.U.S. initial jobless claims are due Thursday.Here are some of the main moves in markets:StocksS&P 500 futures rose 0.1% as of 10:23 a.m. in Tokyo. The gauge declined 2.4% on Wednesday.Japan’s Topix index dropped 0.6%.Hong Kong’s Hang Seng fell 0.9%.South Korea’s Kospi lost 1.2%.Australia’s S&P/ASX 200 Index fell 1%.Euro Stoxx 50 futures were 0.8% lower.CurrenciesThe Bloomberg Dollar Spot Index slid 0.1%.The euro bought $1.1677, up 0.2%.The yen was at 105.39 per dollar.The offshore yuan rose 0.1% to 6.8169 per dollar.BondsThe yield on 10-year Treasuries was at 0.67%.Australia’s 10-year yield rose one basis point to 0.81%.CommoditiesWest Texas Intermediate crude fell 1.1% to $39.51 a barrel.Gold gained 0.2% to $1,867.43 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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