Traders work on the floor of the New York Stock Exchange during morning trading on September 06, 2022 in New York City.
Michael M. Santiago | Getty Images
U.S. equity futures fell on Monday as surging interest rates and foreign currency turmoil threatened to push the S&P 500 to a new closing low for the year.
Dow Jones Industrial Average futures fell 212 points, or 0.7%. S&P 500 futures shed 0.8%. Nasdaq 100 futures lost 0.7%.
The British pound dropped to a record low on Monday against the U.S. dollar. Sterling at one point fell 4% to an all-time low of $1.0382. The Federal Reserve’s aggressive hiking campaign, coupled with U.K.’s tax cuts announced last week has caused the U.S. dollar to surge. The euro hit the lowest vs. the dollar since 2002. A surging greenback can hurt the profits of U.S. multinationals and also wreak havoc on global trade, with so much of it transacted in dollars.
“Such U.S. dollar strength has historically led to some kind of financial/economic crisis,” wrote Morgan Stanley’s Michael Wilson, chief U.S. equity strategist, in a note. “If there was ever a time to be on the lookout for something to break, this would be it.”
On Friday, stocks ended a brutal week with the blue-chip Dow finding a new intraday low for the year and closing lower by 486 points. The broad-market S&P 500 temporarily broke below its June closing low and ended down 1.7%. The tech-heavy Nasdaq Composite lost 1.8%.
Traders will be closely watching the S&P 500 on Monday for any break…