A technology-led selloff that started on Wall Street reverberated across the world as worries over inflation pushed investors to dump expensive stocks. Treasuries were steady while the dollar erased its gains.
The benchmark for European stocks tumbled the most this year, after the Asian gauge posted the biggest losses since March. The tech-heavy Nasdaq 100 Index futures extended a slump that sent the underlying gauge down 2.6% on Monday. S&P 500 contracts fell in sympathy after the index retreated from an all-time high.
Debate rages over whether the expected jump in price pressures will be enduring enough to force the Federal Reserve into tightening policy sooner than current guidance suggests. A measure of U.S. inflation expectations reached the highest level since 2006.
“There is a risk the discussion could trigger market volatility,” according to BlackRock Investment Institute strategists led by Jean Boivin. “We believe investors should look through any such bouts of volatility. The Fed will likely be much slower than in the past to raise rates in the face of rising inflation.”