The projected victory of a far-right party in Italy added to uncertainty about rising interest rates and recession fears, so the U.S. stock-index futures fell late Sunday, suggesting losses Monday.
Dow Jones Industrial Average futures YM 00 fell more than 100 points, or 0.4%, while S&P 500 futures ES 00 and Nasdaq 100 futures NQ 00 fell as well.
All three of them had been relatively flat before it became news that the Brothers of Italy, a far-right party with neo-fascist roots, was projected to win national elections in Italy. That could have ripple effects on the euro, Italian banks and Italian government bonds, further roiling markets.
Wall Street suffered another week of losses Friday after the Fed hiked its jumbo rate hike, and the U.S. Dollar Index DXY rose 0.5% as the greenback continued to gain against the euroUSDEUR and British poundUSDGBP.
The Dow Jones Industrial Average, DJIA, fell 486.27 points, or 1.6%, to close at 29,590. 41, while the S&P 500 SPX dropped 64.76 points, or 1.7%, to finish at 3,693. 23 and the Nasdaq Composite COMP, sank 198.88 points, or 1.8%, to end at 10,867. The Dow dropped 4% for the week, while the S&P 500 fell 4.6% and the Nasdaq fell 5.1%, according to Dow Jones Market Data.
The Fed should raise interest rates enough to slow growth but not enough to cause a recession, and investors are worried about the ability of the Fed to pull off a so-called soft landing.
We need a slowdown, according to Atlanta Fed President Raphael Bostic in an interview Sunday. Bostic said he was optimistic that a soft landing can be achieved, and for the economy to absorb our actions and slow in a relatively orderly way.