ASX futures were 44 points or 0.6% lower at 6909 at 7am on Tuesday, suggesting a fall at the open. American stocks sank as traders fretted over more interest-rate increases against a backdrop of a slowing economy.

The Dow Jones industrial average fell 1.9 percent, or over 640 points, in Monday trading. The S&P 500 fell 2.1 percent, while the technology-focused Nasdaq Composite fell more than 2.5 percent. The drop followed the end of a four-week run of gains for the S&P 500, which fell last week. From July to mid-August, stocks rallied amid hopes that inflation may have started to peak, enabling the Federal Reserve to dial back its push to raise rates, along with generally strong corporate earnings. But Fed officials continued to sound publicly hawkish, raising doubts about the staying power of the midsummer rally.

“The market was getting a little bit ahead of itself,” said Philip Blancato, chief executive of Ladenburg Thalmann Asset Management. “The market wants the Fed to sing from the dovish hymn sheet, but the Fed’s not there yet.”

In commodities, Brent crude fell $0.66 a barrel, and gold was down 0.7% at US$1,735.16. Onshore, Australian 2-Year government bonds got a push up to 2.94% while the 10-Year just managed to scrape up to 3.51%. The yield on 2-year US Treasury notes climbed to 3.32% and 10-year Treasuries were at 3.02%.

The Australian dollar was buying 68.72 US cents, compared to the previous close of 68.76. The Wall Street Journal Dollar Index, which measures the U.S. currency against 16 others, crept up to 100.06.

Asia

Chinese shares finished higher, lifted by sentiment after the country’s banks cut an interest rate on loans to support the slowing economy. Recent supportive comments from Beijing are a good sign, and stimulus measures are beginning to filter through the system in 2H, Nicholas Yeo, abrdn’s head of China equities, says in a note. Suppliers of electric cars rallied, with Tianqi Lithium rising 10 percent and Ganfeng Lithium up 5.3 percent. Coal miners were among the other sectors that rose, with power demand boosted by a heatwave. Shaanxi Coal gained 2.6%, while China Shenhua rose 1.5%. Among laggers, Jiangsu Hengrui Medicine was 2.4% lower due to news it fell 21% in 1H profit. The Shanghai Composite Index advanced 0.6% to 3277.79, the Shenzhen Composite Index rose 0.9%, and the ChiNext Price Index rose 1.6%.

Hong Kong's Hang Seng Index fell 0.6% to 19656.98, dragged lower by electronics shares despite strength in sportswear makers and property developers. Investors are on edge ahead of a highly anticipated speech this week by the Fed’s chair, Jerome Powell. ENN Energy dropped 14% as 1H profit fell 18%. Xiaomi dropped 3.3% after 2Q profit tumbled 83%. The real estate sector was also buoyed by policy support, with the five-year loan prime rate also being cut. Country Garden Holdings advanced 3.2%, Country Garden Services gained 3.9%, and China Resources Land climbed 1.8%.

Japanese stocks finished down as losses in electronics shares weighed, keeping investors’ recent optimism in check over further tightening by the Fed and higher borrowing costs. Omron fell 2.5%, and Rohm declined 2.5%. Hino Motors is down 3.5% after the company acknowledged additional wrongdoing involving applications for engine emissions certification. The Nikkei Stock Average dropped 0.5% to 28794.50. The 10-year JGB yield climbed to 0.215%, up 2 basis points, throughout the session. Economic data is in focus ahead of the Fed’s Jackson Hole summit later this week. USD/JPY trades at 137.08 vs 136.92 late Friday in New York.

Europe

Stoxx Europe 600 Index down 4.19 points or 0.96% to 433.17—DAX down 313.95 points or 2.32% to 13230.57—CAC 40 down 117.09 points or 1.80% to 6378.74.

In London, the FTSE 100 index fell 0.6% to 7504.74 in early trade as investors tread cautiously ahead of a speech by US Federal Reserve chairman Jerome Powell later in the week, when he is expected to offer clues about further interest-rate rises.

“The general summer lull also painted sentiment across U.K. markets, where additional monetary tightening is on the agenda too,” Richard Hunter, the head of markets at the online stockbroker Interactive Investor, said in a note. “There was a further leg down in the oil price on demand concerns, which pulled down BP and Shell, and some softness in the re-opening stocks, like IAG, was counterbalanced a little bit by some tentative demand in the defensive stocks,” he said.

International Consolidated Airlines lost 2.9%; Shell dropped 1.2% and BP 0.8%; and pharma giant AstraZeneca rose 0.9%.

North America

Investors are preparing for comments on Friday from Fed Chairman Jerome Powell, in Jackson Hole, Wyo., on the central bank’s economic outlook. Futures markets indicate that traders are divided over whether the central bank will increase interest rates by one-half of a percentage point or three-quarters of a point at its September meeting. Steep increases could lead businesses and consumers to dial back on spending, potentially undermining corporate earnings and economic growth.

“Jackson Hole is something the market is now worrying about,” said Hani Redha, a portfolio manager at PineBridge Investments. Since the last meeting of the central bank, some investors thought the Fed was likely to be less aggressive about hiking interest rates as economic data turned negative, he said, “and there’s speculation that Powell tries to reverse that perception.”

The yield on the benchmark 10-year Treasury note rose to 3.035%, compared with 2.987% Friday. Yields and prices move in opposite directions.

Netflix, one of the stocks to benefit most from the market’s midsummer rally, fell 6 percent after analysts at CFRA Research advised that investors sell the stock.

Ford Motor shares dropped 5 percent after the company was ordered to pay a $1.7 billion jury verdict on Friday that raises questions about the roof strength of certain trucks. The automaker has said it will appeal.

Bed Bath & Beyond, a favorite among individual investors whose stock has been on a wild ride in recent days, sank nearly 16 percent after S&P lowered the retailer’s credit rating.

After markets closed, Palo Alto Networks and Zoom Video Communications were to report quarterly results.

Currencies

The WSJ Dollar Index, which measures the greenback against a basket of 16 currencies, was slightly higher. The euro also slipped, once more falling below parity with the dollar.

Bitcoin, the largest cryptocurrency by market value, fell 1.1% from its 5 p.m. ET level on Sunday to around $21,277. The digital currency briefly traded around $21,000 on Monday. Crypto prices are largely sentiment-driven, and that has added to the selling when broader markets are selling off.