On Wednesday 7:00am (AEDT), ASX futures were 58 points or 0.8% lower at 6860, indicating a fall at the open.

Stocks in the United States decline for a third consecutive session as economic evidence deepens fears for investors that the Federal Reserve has enough slack to keep pushing up interest rates. Each of the major indexes dragged lower on Tuesday, extending a sharp selloff on expectations for a reset in monetary policy. The S&P 500 fell 44.45 points, or 1.1 percent, to end at 3,986.16. Since stocks began selling off on Friday, more than $1.5 trillion in market capitalization has been scrubbed from the benchmark.

The tech-heavy Nasdaq Composite declined 134.53 points, or 1.1%, to 11883.14. The Dow Jones Industrial Average lost 308.12 points, or 1%, to 31790.87. Stocks started to fall after Federal Reserve Chairman Jerome Powell said Friday that the central bank has to keep raising benchmark interest rates and must ensure it really gets rates to a higher level so they’re no longer a “stimulus” for the economy until policymakers are convinced the inflation genie is back in the bottle. That went against the expectations of some investors that the Fed would dial back the speed of rate hikes amid softer inflation readings.

“Since Chair Powell’s speech, the market has reoriented to focus on macro/money. The Fed is aggressive again, so that’s a cloud of uncertainty hanging over the markets,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

In commodities, Brent crude oil lost 4.93% to $US99.91 a barrel, gold fell 0.73% to US$1,724.37.

In the domestic bond market, the yield on Australian 2 Year government bonds fell to 2.97% and 10 Year bonds dropped to 3.6%. Elsewhere, the yield on 2 Year US Treasury notes rose to 3.46% and the 10 Year US Treasury notes as interest rates crawled to a new low on that index to 3.10%.

The Australian dollar fell to 68.53 US cents from 69.02. The Wall Street Journal Dollar Index, which measures the U.S. currency against 16 others, inched up to 100.27.

Asia

Chinese stocks ended lower, as concerns were widespread over the country’s economic recovery and companies’ earning prospects. “U.S.-China relations and the downturn of property sector questions are among the uncertainties the A-share market still faces,” Shanxi Securities writes in a note. Coal miners were the top laggards, giving back recent gains. China Shenhua Energy dropped 4.3%, while Yankuang Energy declined 5.8%. Renewable-energy stocks also weakened, with LONGi Green falling 1.1% and electric-car battery maker CATL down 2.1%. ZTE, a telecom equipment maker, was one of the gainers, rising 1.7 percent. The Shanghai Composite Index ended down 0.4% at 3227.22, while the Shenzhen Composite Index fell 0.5% and the ChiNext Price Index lost 0.7%.

The Hang Seng Index in Hong Kong slipped 0.4% to 19949.03, adding to Monday’s losses on investor worries about higher interest rates and the economy. Consumer-related sectors and pharma companies declined, while local real-estate stocks rose. China Resources Beer, Anta Sports and Wuxi Biologics dropped 1.3%-1.8% and Wharf REIC gained 0.8%. We also noted some of the worst laggards among blue-chip companies to recently report earnings. Chinese developer Country Garden Holdings declined 4.2% after 1H net profit tumbled 96%, while car dealer Zhongsheng Group slid 7.0% after 1H net profit decreased. Citic Ltd. added 1.1% after recording better 1H profit.

The Nikkei Stock Average climbed 1.1% to 28195.58, rebounding from a selloff Monday following hawkish comments from the U.S. Fed chair. Shares of real-estate developers climbed, with Nomura Real Estate Holdings advancing 1.8%, Tokyu Fudosan up 1.6% and Hulic Co.% higher by 1.2%. Among auto stocks, Honda Motor was up 0.8% and Nissan Motor gained 2.1%. Toyota Motor tacked on 0.7% even as the company said its global vehicle production declined 8.6% on year in July. Ricoh, the electronics company climbed 2.4% after announcing that it will create a biomedical startup fund in September. The dollar was at 138.51 compared with 138.72 late Monday in New York. The 10-year JGB yield declined two basis points to 0.220%.

Europe

European markets were largely lower following a weak start for Wall Street, while concerns about interest rates persisted. The pan-European Stoxx Europe 600 lost 0.7 percent and the French CAC 40 decreased 0.3 percent, while the German DAX rose 0.5 percent.

“It hasn’t taken much time for an optimistic European morning to turn on its head on Tuesday with sharp declines both in Europe and the U.S.,” wrote IG analyst Joshua Mahony. “Regrettably, markets will be vulnerable for some while yet and higher for longer interest rates will persist as inflationary pressures intensify.”

In London, after a long weekend, FTSE 100 dropped 0.9 percent on Monday as energy and mining stocks suffered heavy losses. The owner of British Gas, Centrica, was down 6.6%, while utility group SSE fell 5.1%. Oil major BP was down too. Among miners, Anglo American fell 4.7%, Rio Tinto lost 3.3%, and Glencore fell 3.0%. Distribution group Bunzl also plummeted 6.1% after it failed to meet investor hopes with new financial guidance.

“While it nudged up its operating margin guidance, it’s still on track to make a full-year loss compared with 2021,” said Interactive Investor’s Victoria Scholar.

North America

US shares slumped for a third day running as economic reports ignited investors’ fears that the Federal Reserve has plenty of leeway to continue raising interest rates aggressively.

Each of the major indexes fell on Tuesday, adding to a steep selloff in the days following a reset in monetary-policy expectations. The S&P 500 fell 44.45 points, or 1.1 percent, to 3,986.16. The benchmark has lost more than $1.5 trillion from its market capitalization since stocks started to sell off on Friday.

The tech-heavy Nasdaq Composite fell 134.53 points, or 1.1%, to 11883.14. The Dow Jones Industrial Average fell 308.12 points, or 1%, to 31790.87. The summer stock market rally has come to a screeching halt. With one trading session remaining in August, all three indexes are on pace to post declines of at least 3 percent for the month. On the day the S&P 500 hit its month-ending high close, the market was 17 percent above the point in mid-June from which it led off. It is now sitting 8.7% off that low.

The market also took on a kind of counterintuitive “bad news is good news” dynamic on Tuesday. New data depicting a tight U.S. labour market sent stocks into a tailspin, with investors concerned that strong economic figures would spur the Fed to keep up aggressive interest-rate hikes. Job openings increased in July to a seasonally adjusted 11.2 million, the Labor Department reported Tuesday morning, rebounding from the previous month.

Investors are awaiting the monthly payrolls report due Friday morning for another read on the strength of the labor market and any implications for the path of monetary policy. Economists surveyed by The Wall Street Journal expect that during August 318,000 jobs were added, a gentle downtick from the 528,000 payrolls gain recorded in July.

Tuesday’s retreat in stocks was wide, with all 11 sectors of the S.&P. 500 ending lower. All but two of the components in the blue-chip Dow industrials ended in negative territory.

On the corporate-earnings front, shares of Best Buy and Big Lots climbed 1.6% and 12%, respectively, after the retailers reported quarterly results that beat analyst expectations. Yet the companies cautioned that spending could slacken anew as consumers grapple with hot inflation.

As the second-quarter earnings reporting season winds down, economic reports may take on more meaning for investors left to ponder without corporate dispatches, said Joe Zappia, principal, co-chief investment officer for LVW Advisors.

“More important are not the economic releases themselves over the next couple of weeks but rather how the markets react to it. That will provide a hint about sentiment and positioning,” he said.

In other US economic news released Tuesday, attitudes among Americans towards jobs and the economy brightened in August from the previous month, according to the Conference Board consumer-confidence index.

On Tuesday, the latest figures from the S&P CoreLogic Case-Shiller National Home Price Index, which covers average home prices in major metropolitan areas across the country, showed that home-price growth decelerated in June as rising mortgage rates pushed homeownership further out of reach.