HomeFinancial MarketsGlobal Stocks Set for Weekly Loss Following Rate Rise

Global Stocks Set for Weekly Loss Following Rate Rise

Global stocks are on course for their first weekly loss of the new year as a rally inspired by China’s economic reopening is extinguished by central banks’ resilience to continue interest rate hikes.

European Central Bank President Christine Lagarde confirmed at the World Economic Forum’s Davos gathering on Thursday that the bank would continue to raise its interest rates for the foreseeable future. The U.S. Federal Reserve has remained resolute in its interest rate tightening campaign despite signs of retail sales, producer prices, and production falling more than expected.

Boston Fed President Susan Collins supported this plan, explaining that the Federal Reserve would need to raise rates above 5% in order to hold inflation in place.

Thursday’s U.S. weekly jobless claims report showed that jobless claims were lower than expected, indicating a tight labor market. The S&P 500 sank 0.8% lower following this update.

While set for a weekly loss overall, U.S. and European stocks ticked slightly higher on Friday morning, with the Stoxx Europe 600 Index edging higher by 0.1% on Friday and S&P Futures advancing 0.3% higher.

The dollar index, which measures the greenback against a basket of major currencies, rose 0.14 higher to 102.17.

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