US stock futures fall, dollar rises as Italian election results heighten uncertainty

US stock index futures fell late Sunday, pointing to losses on Monday as a far-right party’s forecast victory in Italy added to uncertainties over rising interest rates and recession fears.

After the Dow Jones Industrial Average futures YM00 fell nearly 200 points earlier in the session,
down about 150 points, or 0.5%, at midnight Eastern while S&P 500 Futures ES00,
and Nasdaq 100 Futures NQ00,
were also about 0.5% lower in choppy trade.

Investors may have been reassured by the dovish tone of Italy’s far-right leader Giorgia Meloni on Sunday night after partial national election results showed her party as a likely winner.

Stock futures were relatively flat before news that the Brothers of Italy, a far-right party with neo-fascist roots, were likely to win. This could affect the euro, Italian banks and Italian government bonds and further roil the markets.

The US dollar index DXY,
up 0.7% as the greenback continued its recent gains against the euro USDEUR,
and British pound USDGBP,
which fell to a record low against the dollar.

Wall Street suffered another week of losses on Friday in the wake of the Fed’s latest jumbo rate hike.

The Dow Jones Industrial Average DJIA,
fell 486.27 points, or 1.6%, to close at 29,590.41, while the S&P 500 SPX,
fell 64.76 points, or 1.7%, to 3,693.23 and the Nasdaq Composite COMP,
declined 198.88 points, or 1.8%, to end at 10,867.93.

According to Dow Jones Market Data, the Dow fell 4% this week, while the S&P 500 slipped 4.6% and the Nasdaq fell 5.1%.

Investors are concerned about the Fed’s ability to pull off a so-called “soft landing” — raising interest rates enough to slow growth but not enough to trigger a recession.

“We need a slowdown,” Atlanta Fed President Raphael Bostic said in an interview on Sunday. But Bostic said he was optimistic a soft landing can be achieved and “the economy absorbs our actions and slows down in a relatively orderly fashion.” US stock futures fall, dollar rises as Italian election results heighten uncertainty

Brian Lowry

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