The US market meltdown will likely continue on Thursday as key US indices are down sharply in pre-market trading. The Dow Jones fell more than 800 points in the previous session.
As of 10:00 am GMT, Dow futures plunged 238 points, futures on the S&P 500 sank 22.5 points, while Nasdaq futures were down 49.5 points.
The sell-off on Wednesday was triggered by a depreciation in US Treasury bonds earlier this week. The benchmark 10-year Treasury yield surged to a seven-year high on Tuesday and the 30-year bond yield jumped to its highest since 2014.
Concerns about US Federal Reserve interest rates are also worrying investors. The Fed policy has been criticized by President Donald Trump.
“I like low interest rates,” said Trump, adding that the Fed “has gone crazy,” and that the Fed was going loco about rising rates.
The US Federal Reserve raised rates on September 26 for the third time this year and the seventh time since Trump was elected. The International Monetary Fund chief Christine Lagarde said on Thursday that she “would not associate” US Federal Reserve Chairman Jerome Powell “with craziness.”
“One thing that people can count on is that when interest rates go up it can throw a cold towel on an overheating economy and thats what it looks like is happening now,” Sandy Villere, portfolio manager at Villere & Co in New Orleans, told Reuters.
Stock markets across the globe followed the sell-off in the US. Japans Nikkei, Chinas Shanghai Composite, and markets in Europe are all down sharply on Thursday.
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