# World equities fall, U.S. Treasury yields rise after hawkish Fed
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-04
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Global Equities Fall, US Treasury Yields Rise: Market Impact
Meta Description: Stay informed on market trends as global equities drop and U.S. Treasury yields climb post-Fed rate hikes. Fed Chair Powell's statements signal potential
URL: https://financedigest.com/world-equities-fall-u-s-treasury-yields-rise-after-hawkish-fedhtml

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By Chibuike Oguh

NEW YORK (Reuters) -Global equities fell while U.S. Treasury yields rose on Thursday as investors weighed hawkish commentary from Federal Reserve Chair Jerome Powell on the prospects of further interest [rate hikes targeted at reining in inflation](https://www.financedigest.com/uk-inflation-rate-unexpectedly-rises-to-10-4-in-february.html "UK inflation rate unexpectedly rises to 10.4% in February").

Market sentiment has been bearish after the Fed on Wednesday raised rates by 75 basis points and Powell said during a [press conference](https://www.financedigest.com/5-top-tips-when-holding-a-crisis-press-conference.html "5 Top Tips When Holding a Crisis Press Conference") that the “ultimate level” of interest rates is likely higher than previously estimated, and the central bank still has “some ways to go.

Traders, who were expecting the [Fed to strike a more dovish stance after delivering its fourth consecutive rate hike](https://www.financedigest.com/dollar-falls-after-fed-raises-rates-forecasts-future-hike.html "Dollar falls after Fed raises rates, forecasts future hike"), were rattled.

We’ve done 400 basis points in eight months – one of the steepest ascents in tightening in history – and to not sit [back and see for a few months how the data](https://www.financedigest.com/dollar-advances-as-strong-u-s-data-backs-higher-rates-backdrop.html "Dollar advances as strong U.S. data backs higher rates backdrop") comes in is just reckless,” said Thomas Hayes, chairman at Great Hill Capital in New York.

The MSCI world equity index, which tracks [shares in 50 countries](https://www.financedigest.com/netflix-cuts-prices-in-some-countries-to-boost-subscriptions-shares-drop.html "Netflix cuts prices in some countries to boost subscriptions, shares drop"), shaved almost 2%. European stocks dropped nearly 1% after the [Bank of England delivered its biggest rate rise](https://www.financedigest.com/the-rise-of-biometric-technology-in-banking.html "The rise of biometric technology in banking") since 1989.

On [Wall Street](https://www.financedigest.com/wall-street-drops-treasury-yields-gyrate-on-fed-chairman-powells-remarks.html "Wall Street drops, Treasury yields gyrate on Fed Chairman Powell’s remarks"), all three major indexes closed lower, led by a selloff in technology, communication services, financials, healthcare, and consumer discretionary stocks.

The Dow Jones Industrial Average fell 0.46% to 32,001.25, the S&P 500 lost 1.06% to 3,719.89 and the Nasdaq Composite dropped 1.73% to 10,342.94.

I think the kind of double [talk that we saw yesterday is really beginning to massively erode the credibility of anything they say](https://www.financedigest.com/virgin-orbit-says-space-startup-in-talks-with-potential-investors.html "Virgin Orbit says space startup in talks with potential investors"). What’s going to happen is that at some point, they’re going to talk hawkish and the [market is going to rally,”](https://www.financedigest.com/jittery-markets-attempt-risk-on-rally-while-waiting-for-powell.html "Jittery markets attempt risk-on rally while waiting for Powell") Hayes added.

Treasury yields were higher, with the two-year note climbing toward 5%, following [comments by the Fed](https://www.financedigest.com/oil-dips-after-fed-comments-us-crude-stock-build.html "Oil dips after Fed comments, US crude stock build") chair and the interest rate hikes by the U.S. and [British central banks](https://www.financedigest.com/hsbc-acquires-british-arm-of-stricken-silicon-valley-bank.html "HSBC acquires British arm of stricken Silicon Valley Bank"). Both notes have pared [back some gains from the previous day’s](https://www.financedigest.com/love-in-a-time-of-inflation-how-much-will-valentines-day-set-you-back.html "Love in a time of inflation: how much will Valentine’s Day set you back?") session.

The yield on the benchmark 10-year note rose to 4.149%, while the two-year yield, which typically moves in step with interest [rate expectations](https://www.financedigest.com/ecbs-makhlouf-expects-50-bps-rate-hike-in-december.html "ECB’s Makhlouf expects 50 bps rate hike in December"), was up at 44.7117%.

The U.S. [dollar strengthened after the Fed’s](https://www.financedigest.com/dollar-pauses-for-breath-as-fed-swings-into-focus.html "Dollar pauses for breath as Fed swings into focus") hawkish comments, while the euro and the pound slid after the BoE’s statement. The dollar index rose 1.46%, with the euro down 0.7% to $0.9748.

Oil [prices fell as an increase](https://www.financedigest.com/syngenta-4q-profit-falls-as-raw-material-prices-increase.html "Syngenta 4Q profit falls as raw material prices increase") in U.S. interest rates pushed up the dollar and heightened [fears of a global recession that would crimp fuel demand](https://www.financedigest.com/oil-rises-on-demand-hopes-as-banking-crisis-fears-subside.html "Oil rises on demand hopes as banking crisis fears subside").

Brent futures were down 1.5% to settle at $94.67 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 2.0% to settle at $88.17.

[Gold prices fell to a more than one-month low after the dollar](https://www.financedigest.com/stocks-and-gold-cheer-u-s-inflation-picture-while-dollar-slides.html "Stocks and gold cheer U.S. inflation picture, while dollar slides") gained following the Fed’s stiff interest rate stance. Spot gold dropped 0.3% to $1,630.15 an ounce, while U.S. gold futures settled 1.2% lower at $1,630.9.

(Reporting by Chibuike Oguh in New York; Editing by Chizu Nomiyama and William Maclean)


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