Market Turmoil: Stocks Drop as Fed Rate Cuts Stall

Global stock markets are experiencing their largest weekly downturn in two months, spurred by ongoing Federal Reserve signals towards slower interest rate cuts. Despite robust retail sales and rising import prices, investor confidence wanes due to potential inflation from fiscal policies. The U.S. dollar and bond yields soar.

Global stock indices are undergoing their most significant weekly decline in two months, driven by the Federal Reserve's indication of a slower pace in cutting interest rates. The U.S. Commerce Department's report of a 0.4% rise in retail sales last month surpassed expectations, showcasing ongoing economic strength.

Meanwhile, the Labor Department's unexpected report of a 0.3% rise in import prices challenges analysts' predictions, mainly due to increased fuel costs. Fed Chair Jerome Powell emphasized the central bank's cautious approach, citing economic resilience, a solid job market, and persistent inflation concerns as reasons for holding back rate cuts.

The global market tremors are influenced by potential inflationary pressures, rekindled by President-elect Donald Trump's proposed policies. On Wall Street, major indexes posted losses, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all falling. Bond yields and the dollar strengthened further, reflecting cautious investor sentiment.

(With inputs from agencies.)