U.S. stock
futures and Asian shares slid on Thursday, hit by soft U.S. economic
data, a relatively hawkish Fed and a media report that U.S. President
Donald Trump is being investigated by a special counsel for possible
obstruction of justice.
S&P
mini futures dipped 0.3 percent. MSCI's broadest index of Asia-Pacific
shares outside Japan dropped 0.7 percent while Japan's Nikkei fell 0.4
percent.
The Federal Reserve raised interest rates as expected on Wednesday and gave a first clear outline on its plan to reduce its $4.2-trillion portfolio of bonds.
Fed Chair Janet Yellen said the process could start "relatively soon", while projections of Federal Reserve Board members also showed they expect one more rate hike by the end of year.
A majority of Wall Street’s top banks now expect the Fed to start reducing re-investment in bonds in September, compared to their previous median forecast of such a move in December.
Yet the Fed's decision and confidence in continued U.S. economic growth was over-shadowed by surprisingly weak data released earlier in the day.
Consumer prices unexpectedly fell on month in May and the annual increase in core CPI slipped to 1.7 percent, the smallest rise since May 2015, after advancing 1.9 percent in April.
Investors' inflation expectations gauged by the spread between the 10-year inflation-linked bonds and conventional bonds fell to 1.726 percent, completely wiping out its rise since the U.S. presidential election.
Retail sales fell 0.3 percent last month -- the largest fall since January 2016 and way below economists' expectations for a 0.1 percent gain -- amid declining purchases of motor vehicles and discretionary spending.
Risk sentiment was also hit by fear of more U.S. political turmoil after Washington Post reported that Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.
The news came just after the No. 3 Republican in the House of Representatives, Steve Scalise, was shot by a gunman angry with Trump and other Republicans. Scalise was listed in critical condition.
The weak U.S. data had knocked the dollar and U.S. bond yields to its lowest level in seven months against a basket of currencies.
The Federal Reserve raised interest rates as expected on Wednesday and gave a first clear outline on its plan to reduce its $4.2-trillion portfolio of bonds.
Fed Chair Janet Yellen said the process could start "relatively soon", while projections of Federal Reserve Board members also showed they expect one more rate hike by the end of year.
A majority of Wall Street’s top banks now expect the Fed to start reducing re-investment in bonds in September, compared to their previous median forecast of such a move in December.
Yet the Fed's decision and confidence in continued U.S. economic growth was over-shadowed by surprisingly weak data released earlier in the day.
Consumer prices unexpectedly fell on month in May and the annual increase in core CPI slipped to 1.7 percent, the smallest rise since May 2015, after advancing 1.9 percent in April.
Investors' inflation expectations gauged by the spread between the 10-year inflation-linked bonds and conventional bonds fell to 1.726 percent, completely wiping out its rise since the U.S. presidential election.
Retail sales fell 0.3 percent last month -- the largest fall since January 2016 and way below economists' expectations for a 0.1 percent gain -- amid declining purchases of motor vehicles and discretionary spending.
Risk sentiment was also hit by fear of more U.S. political turmoil after Washington Post reported that Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.
The news came just after the No. 3 Republican in the House of Representatives, Steve Scalise, was shot by a gunman angry with Trump and other Republicans. Scalise was listed in critical condition.
The weak U.S. data had knocked the dollar and U.S. bond yields to its lowest level in seven months against a basket of currencies.
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