International stocks fell Friday, tracking declines in US indices as a bond sell-off aided investor interest in rich-valued stocks.
However, US Treasuries rose in price, regaining some of the losses from the previous session, and futures-proposed New York stocks could stabilize or rise slightly in Friday trading.
Investors said the market was reassessing the outlook for rate hikes by the US Federal Reserve, despite Chairman Jerome Powell’s assurances that the central bank will not hike rates any time soon.
“What has happened in recent weeks is that markets have had to repeat expectations of the Federal Reserve’s rate hikes,” said Dwyfor Evans, chief macro strategy for the Asia-Pacific region at State Street Global Markets in Hong Kong.
He said the pick-up in bond yields would have a knock-on effect in areas like corporate loans and mortgage rates. “That’s why equities will come under pressure here, as rising interest rates will have some impact on the real [economy] and revenues should slow down, ”Mr. Evans said.