- US futures fell Friday but were still on track for a fifth weekly gain in a row.
- Three Fed policymakers took a hawkish tone on interest rate hikes, weighing on investor risk appetite.
Global stocks slid on Friday as investors fretted once again about interest rate hikes after three Federal Reserve policymakers made hawkish statements.
US futures slipped but are still on track to finish a fifth straight week in the green after St Louis Fed President James Bullard told the Wall Street Journal the US central bank should hike rates 75 points in September.
The Dow Jones looked set to drop at Friday's opening bell, with futures down 0.62%. S&P 500 futures were down 0.84%, while Nasdaq futures fell 1.08% in early-morning trading.
Markets have wobbled after the release of the minutes from the Fed's July meeting, which showed policymakers advocating for rates being maintained at a "sufficiently restrictive level". Like Bullard, San Francisco Fed president Mary Daly and Kansas City Fed president Esther George advocated further aggressive rate hikes Thursday.
"We maintain our view that the Fed will raise rates by another 100 basis points by year-end, with risks of more hikes if inflation does not slow in line with our forecasts," UBS CIO Mark Haefele said. "Against this still uncertain backdrop, we favor defensive and quality stocks, along with value stocks - which historically have outperformed in periods of elevated inflation."
International stocks also wobbled on hawkish Fed expectations, with the MSCI World Index sliding 0.28%.
Europe's flagship Stoxx 600 fell 0.45% after the opening bell, with Paris's CAC 40 sliding 0.70% and London's FTSE 100 down 0.30%. Frankfurt's DAX 40 threatened double-digit losses Friday, plummeting 0.93%.
It was more of a mixed picture for Asian equities, with Hong Kong's Hang Seng climbing 0.04% and Tokyo's Nikkei 225 slipping 0.04%. The Shanghai Composite fell 0.59% after China's central bank devalued the yuan, implying that it expects an economic slowdown in the second half of 2022.
Oil also slipped slightly on expectations of a Chinese slowdown, with Brent crude falling 1.38% to just over $95 a barrel and WTI crude down 1.41% to just over $89 a barrel.
Expectations of aggressive rate hikes also helped to push the dollar to a one-month high, with the US Dollar Index jumping 0.20% to 107.70. US Treasurys also benefited from the Fed's renewed hawkishness, with 10-year yields up 5 basis points to 2.93% and 2-year yields climbing 1 basis point to 3.23%.
Elsewhere, the Chinese yuan slipped to a three-month low against the greenback after the country's central bank set a softer fix for its currency. Spot prices slipped 0.34%, with one yuan now worth 14.69 cents.