Market Jitters: Global Stocks Drop as Investors Eye Fed Policies

Global stock markets fell while the U.S. dollar surged after strong U.S. jobs data suggested the Federal Reserve might halt rate cuts. Investors are cautious ahead of key inflation data, with concerns about potential policy changes under new administration. Bond yields and energy prices also surged, fuelling inflation concerns.

Global stock markets saw a downturn on Monday, while the U.S. dollar index climbed to its highest in over two years. This comes after robust U.S. jobs data led investors to question whether the Federal Reserve has halted its interest rate cut cycle.

Attention now turns to Wednesday's Consumer Price Index report, anticipated to reflect a possible uptick in inflation, and potentially reinforcing the Fed's more hawkish stance against further rate cuts. The report follows a strong December jobs report that exceeded expectations.

Market sentiment remains cautious amid fears of inflation and policy shifts under the incoming U.S. administration. Meanwhile, rising bond yields, particularly the benchmark 10-year yield, compounded stock market declines, led by the technology sector. Global energy prices also rose, adding to inflationary pressures.

(With inputs from agencies.)