European markets plummet, US extends losses

By Ovunc Kutlu

ANKARA (AA) - European stock exchanges closed Monday with massive drops, while US indices extended their losses, amid investors' fears that the Federal Reserve may signal policy changes later this week.

The STOXX Europe 600, which includes around 90% of the market capitalization of the European market in 17 countries, was down by 7.7 points, or 1.67%, to 454.12.

London's FTSE 100 lost 59 points, or 0.86%, to 6,903, and Germany's DAX index fell by 358, or 2.3%, to 15,132 points.

The French CAC 40 lost 114 points, or 1.7%, dropping to 6,455 points, while Spain's IBEX was down by 105 points, or 1.2%, falling to 8,655 points.

Italy's FTSE MIB was the worst performer of the day with a decline of almost 2.6%, or 661 points, to 25,048.

Investors are awaiting a two-day Fed meeting that will conclude on Wednesday when the central bank may signal an interest rate hike by late 2022, and begin tapering – the process of reducing accumulating $120 billion monthly assets on its balance sheet – next month.

- US indices

Amid Fed expectations, US stock exchanges started the day lower and later extended their losses.

The Dow Jones dove more than 700 points, or 2%, to 33,871 at 12.31 a.m. EDT (1631GMT), while the S&P 500 lost 93 points, or 2.1%, to 4,339.

Banking majors Goldman Sachs and Morgan Stanley slid 4.4% and 3.6%, respectively.

The Nasdaq shed almost 390, or 2.6%, to 14,653 with AMC Entertainment and BlackBerry losing 8.2% and 7.1%, respectively.

The price of Bitcoin, the world's largest crypto currency by market cap, was down 7.3% to $44,000 while some altcoins shed up to 27%.

Investors took more interest in precious metals earlier, but some of them also dove to negative territory. Gold was up 0.3% to $1,763 per ounce, but silver fell 0.8% to $22.22.

Amid the Fed uncertainty and fears, the VIX volatility index jumped 28.4% to 26.72, while the dollar index added 0.07% to 93.26. The yield on 10-year US Treasury notes lost 4.6% to 1.307%.

A higher dollar created downward pressure on oil prices. Brent crude was down 1.6% to $74.12 per barrel, and West Texas Intermediate declined 2% to $70.39.