US, European equities tumble as Fed shock halts global rally

Bloomberg

US equity-index futures and European stocks declined after the Federal Reserve rebuffed expectations for a dovish tilt and said interest rates will go higher for longer.
Contracts on the S&P 500 and Nasdaq 100 gauges fell at least 1.1% each. Demand for haven assets sent the dollar and Swiss franc higher amid a wave of rate hikes from Taiwan to Norway. The euro halted a two-day advance as traders awaited policy decisions from the European Central Bank (ECB) and Bank of England (BOE). Oil slid on signs of increasing supply.
A global rally sparked by softer-than-forecast US inflation came to an abrupt halt after policymakers signalled a peak rate that was far above market expectations and sought to dispel hopes for a rate cut next year. Chair Jerome Powell reaffirmed the central bank won’t back away from its fight against inflation despite mounting fears of job losses and a recession.
An index of the dollar’s strength headed for the biggest gain since December 5. The euro falls from a six-month high, while Britain’s pound declined for the first time in seven days. The ECB and BOE are expected to follow the Fed with half-point hikes.
The Swiss franc held its gain after the nation’s central bank doubled the policy rate to 1% as forecast. China’s yuan falls as poor economic data and a surge in Covid cases weighed.
Europe’s equity benchmark, the Stoxx 600, tumbled the most since November 3, dragged by consumer and retail shares.
Shorter-dated Treasury yields edged higher, with the two-year rate adding 3 basis points. The 10-year rate was little changed as investors weighed the economic impact of Fed’s hawkishness.
The Stoxx Europe 600 falls 1.2% as of 10:09 am London time and futures on the S&P 500 also drop as much as 1.1%.