US stock markets open with steep declines over Fed move fears

By Ovunc Kutlu

ANKARA (AA) - Major stock markets in the US opened Monday with steep declines amid investors' worries that the Federal Reserve may signal some policy changes later this week.

The Dow Jones was down 486 points, 1.4%, to 34,088 at 9.37 a.m. EDT (1337GMT), while the S&P 500 lost 61 points, or 1.4%, to 6,381. Banking majors Goldman Sachs and Morgan Stanley shed around 3% each.

The Nasdaq shed 250, or 1.67%, to 14,793 with Coinbase, AMC Entertainment, Alibaba, and Novavax all diving more than 4% apiece.

The price of Bitcoin, the world's largest crypto currency by market cap, was down 7.4% to $43,770, while some altcoins shed up to 27%.

Investors took more interest in precious metals, but some of them also dove to negative territory. Gold was up 0.12% to reach $1,757 per ounce, but silver fell 0.3% to $22.34.

Amid the Fed uncertainty and fears, the VIX volatility index jumped 15.1% to 23.96, while the dollar index added 0.14% to 93.33. The yield on 10-year US Treasury notes lost 2.7% to 1.333%.

A higher dollar created downward pressure on oil prices. Brent crude was down 1% to $74.61 per barrel, and West Texas Intermediate declined 1.3% to $70.86.

Investors are awaiting a two-day Fed meeting that will conclude on Wednesday, where the central bank may signal an interest rate hike by late 2022, earlier than its previous projection of two rate hikes in 2023.

A verdict on whether the bank's much-anticipated tapering – the process of reducing accumulating $120 billion monthly assets on its balance sheet – will start next month is also expected.