Global stocks tumbled after a broad group of central banks raised interest rates and warned of further increases to come in the fight to tame inflation.
The benchmark S&P 500 index fell 2.5 per cent on Thursday, its biggest daily loss since early November, following hawkish warnings on interest rates from central banks in the US, UK, Europe and Switzerland over the past day. The tech-heavy Nasdaq Composite dropped 3.2 per cent, also its biggest loss since November. In Europe, the broad Stoxx 600 fell 2.8 per cent, its biggest loss since May.
The US Federal Reserve, European Central Bank and Bank of England this week have all slowed the pace of interest rate rises, opting for 0.5 percentage point increases. But investors were rattled by the hawkish tone of the meetings, in particular by comments from the ECB that “inflation remains far too high” and that rates would continue to rise by 0.5 percentage points “for a period of time”.