Stock market today: Stocks fall worldwide as allure grows to buy a Treasury bill and chill

NEW YORK (AP) — Wall Street is slumping again as stock prices fell worldwide on expectations that U.S. interest rates will stay high well into next year. The S&P 500 was down 0.8% early Thursday. That follows a 0.9% drop a day earlier after the Federal Reserve indicated it may cut interest rates next year by only half of what it had earlier been predicting. The Fed has already hiked its main rate to the highest level since 2001. The Nasdaq composite fell 0.9%, and the Dow lost 202. The yield on the 10-year Treasury rose to 4.46%, near it highest level since 2007.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Markets on Wall Street are poised to open with losses on Thursday after the Federal Reserve said it may not cut interest rates next year by as much as it previously thought.

On Wall Street, futures for the S&P 500 were down 0.8% before the bell, while futures for the Dow Jones Industrial Average fell 0.6%.

That follows losses Wednesday after the Fed held its main interest rate steady at its highest level in more than two decades, as expected. Officials also indicated they may raise the federal funds rate once more this year as they try to get inflation down to a 2% target.

Perhaps more importantly for the market, Fed officials also suggested they may cut rates next year by only half a percentage point. Three months ago, they were penciling in a full percentage point of cuts in 2024.

“Moving forward, traders will scrutinize every piece of data from the U.S., with a particular emphasis on inflationary indicators, to gauge the potential for prolonged high rates,” Anderson Alves of ActivTrades said in a commentary.

The Fed’s chair, Jerome Powell, said the Fed is close to hitting the peak on rates, if not there already.

Powell, though, stressed that forecasts about where rates and other indicators are heading could change as more data come in.

“Forecasters are a humble lot, with much to be humble about,” Powell said.

High rates hurt prices for all kinds of investments, especially technology stocks, and the news cast a pall on early trading Thursday.

On the corporate side, FedEx jumped after it easily beat profit expectations and raised its full-year profit forecast. Shares rose more than 5% in premarket.

Technology conglomerate Cisco said it will acquire cybersecurity company Splunk for $157 per share in cash in a deal approaching $28 billion in equity value. Cisco shares fell nearly 4% before the bell while trading in Splunk was halted.

In Europe at midday, Germany’s DAX declined 1.1%, the CAC 40 in Paris retreated 1.4% while Britain’s FTSE 100 gained 0.5%.

In Asian trading, Hong Kong’s Hang Seng lost 1.3% to 17,665.41 and the Shanghai Composite index gave up 0.8%, to 3,084.70.

Tokyo’s Nikkei 225 was off 1.4% at 32,571.03, while in Seoul the Kospi shed 1.6% to 2,514.97. Australia’s S&P/ASX 200 slipped 1.4% to 7,065.20.

Shares of electronics and energy giant Toshiba Corp. gained 0.2% Thursday after it announced that a 2 trillion yen ($14 billion) tender offer for the troubled electronics and energy giant by a Japanese consortium has been completed, clearing the way for it to be delisted.

New Zealand’s benchmark stock index fell less than 0.1% as figures released Thursday by Statistics New Zealand indicated the economy expanded at a 3.2% annual pace in the April-June quarter. Finance Minister Grant Robertson said the economy was turning a corner and growing at twice the rate predicted by economists.

The figures come on the same day that dairy exporter Fonterra reported a 170% increase in its annual after-tax profit to 1.6 billion New Zealand dollars ($948 million). Fonterra warned, however, of falling milk prices due to reduced demand for milk powder from countries like China. Its shares jumped 3.1%.

In other trading Thursday, U.S. benchmark crude oil lost 60 cents to $89.06 a barrel in electronic trading on the New York Mercantile Exchange. It gained 82 cents on Wednesday.

Brent crude, the pricing basis for international trading, declined 68 cents to $92.85 a barrel.

The U.S. dollar slipped to 147.90 Japanese yen from 148.35 yen. Traders are watching to see what the Bank of Japan does when it wraps up a monetary policy meeting on Friday. No major changes are expected, but analysts say they believe the central bank is moving toward a change in its longstanding negative interest rate policy.

The euro weakened to $1.0641 from $1.0661.

On Wednesday, the S&P 500 fell 0.9% and the Dow industrials lost 0.2%. The Nasdaq composite dropped 1.5%.

___

AP Writer Nick Perry in Wellington, New Zealand contributed.