European Markets Slide 1%

European stocks are trading lower on Thursday. It followed losses in the United States on Wednesday when the Dow Jones Industrial Average fell for the first time in 2022.

The pan-European Stoxx 600 index was down 1% by mid-morning, recovering some early losses.

All sectors, except banks and automobiles, were in the red, as were the majority of major indices.  Investors became increasingly concerned about future interest rate hikes in the United States. Hence, tech stocks led the declines, falling nearly 2.5 percent. Future earnings of technology stocks are seen as less appealing to investors when bond yields are higher and are vulnerable when rates rise. European markets fell alongside their Asian counterparts on Thursday, following losses in the United States on Wednesday.

The declines followed the release of minutes from the Federal Reserve’s December meeting. It revealed that officials prepared to reverse the central bank’s pandemic-era easy monetary policy aggressively.

The Fed’s plan to reduce the number of Treasury bonds and mortgage-backed securities it holds comes as it is already tapering its bond purchases.

Following the release of the minutes, major Wall Street indexes fell sharply, with the S&P 500 falling 1.94 percent to 4,700.58. Dow Jones Industrial Average dropped 392.54 points to 36,407.11.

Global Stocks Market

On Thursday, global stock markets fell after the Federal Reserve sparked a major sell-off on Wall Street by signaling that it may withdraw economic stimulus more aggressively than expected.

Some Asian markets fell sharply, with the Nikkei (N225) in Japan and the S&P/ASX 200 in Australia falling 2.9 percent and 2.7 percent, respectively. The Kospi (KOSPI) in South Korea fell 1.1 percent. China’s stock market was flat.

In early trading, European stocks fell. The CAC 40 in France fell 1.4 percent, while the DAX 30 in Germany fell 1.1 percent. In London, the FTSE 100 fell 0.9 percent.