Stock markets in New York started Monday with losses to the important week of the Federal Reserve. The US central bank begins its two-day interest rate meeting on Tuesday.
The interest rate decision will follow on Wednesday, and interest rates are expected to be raised again by 0.75 percentage points to combat high inflation.
At the beginning of last week, there was still optimism in the financial markets that the Fed might raise interest rates slightly less aggressively, but a disappointing inflation figure dashed that hope. As a result, investors fear that the interest rate hikes by the central banks will trigger a global recession. That fear was further fueled last Friday by a FedEx profit alarm.
The parcel carrier lost more than a fifth of its stock market value on Friday after withdrawing its profit forecast. Due to its logistics activities, the company is seen as a barometer for economic development. FedEx noticed that the number of parcel shipments has fallen due to the deteriorating economic conditions. As a result, FedEx shares rose 1.7 percent on Monday.
Shortly after opening, the Dow Jones index was 0.6 percent lower at 30,630 points. The S&P 500 also lost 0.6 percent to 3,852 points, and tech gauge Nasdaq fell 0.5 percent to 11,385 points.
Take-Two Interactive fell nearly 2 percent. A hacker has published images of the highly anticipated game Grand Theft Auto VI, developed by Rockstar Games, a subsidiary of Take-Two Interactive. It is one of the biggest leaks in the gaming sector ever.
Furthermore, Adobe (minus 0.4 percent) was among the losers after a recommendation reduction. According to experts, investors should wait for further developments regarding the acquisition of start-up Figma. Adobe, the company behind Photoshop, shocked investors last week by announcing a $20 billion grant to Figma, a company that provides platforms for software developers to collaborate on.
Crypto exchange Coinbase lost 4.3 percent after a sharp decline in bitcoin. The world’s largest digital currency plunged to its lowest level since 2020. Other cryptocurrencies such as ether and XRP also fell as crypto investors have become more cautious due to higher interest rates.