Stock market drop spreads, Wall Street set to fall again (Source Associated Press) World stock markets sank Thursday, extending losses from Wall Street, as investors worried that higher interest rates will dent company earnings and a trade war will crimp global business. European shares sank after Asia closed sharply lower, auguring another drop in the U.S., which saw its major indexes tumble on Wednesday. Investors will be looking ahead to U.S. inflation data later in the day. A high reading could fuel expectations that the Federal Reserve will keep raising its interest rates at a steady pace, reining in the easy money policy that had fueled stock markets in recent years.
“Equity markets were pulverized today,” with investors in “full out retreat,” analyst Stephen Innes of OANDA said in a commentary. The “latest sneeze” from Wall Street “could morph into a global markets pandemic,” he added.
“Equity investors are surprised by the pace at which rates have risen,” Marcella Chow, global market strategist at J.P. Morgan Asset Management, said in a report.
On Wednesday, U.S. President Donald Trump said the Federal Reserve “is making a mistake” with its campaign of rate increases. “I think the Fed has gone crazy,” he charged.
Sentiment also has been dampened by the spreading U.S.-Chinese tariff fight over Beijing’s technology policy. The International Monetary Fund cut its outlook for global growth this week, citing interest rates and trade tensions.