- US stocks slipped in early-morning trading as investors digested the Federal Reserve's latest move.
- Bond market volatility continued, while the dollar again edged towards a new 20-year high.
- European stocks also fell after Wednesday's emergency European Central Bank meeting.
Stocks look set to end a third week in a row in the red, with US futures and world indices sliding on Wednesday, in a week of historic central bank action to tackle inflation.
Investors are still digesting two major central bank monetary policy moves. The Federal Reserve hiked interest rates by 75 basis points for the first time since 1994 yesterday, while the European Central Bank said it's preparing an anti-crisis tool as bond yields surge.
Futures on the Nasdaq 100 led the US sell-off in early-morning trading in Europe, tumbling 2.21%. Those on S&P 500 and Dow Jones Industrial Average slipped 1.75% and 1.35% respectively.
"The stock market seems stricken by indecisiveness in the wake of yesterday evening's decision," Chris Beauchamp, chief market analyst at IG Group, said. "Investors can be excused for feeling rather dazed and confused, but these are confusing times. Everything still seems to be teetering on a precipice"
European investors appear similarly indecisive after the ECB's emergency meeting.
The continent's flagship STOXX 600 index was down 1.39%, with Frankfurt's DAX 40 falling 2.18% and Paris' CAC 40 slipping 1.51%. The UK's FTSE 100, which has held up relatively well over the past few months of volatility, slid 1.52%.
Those movements dragged global stocks into the red, with the MSCI World Index falling 0.27%, heading for a third weekly loss. Hong Kong's Hang Seng fell 2.57% and the Shanghai Composite was down 0.61%, but Japan's Nikkei 225 was up 0.40% at the closing bell.
"We are still living in the same world we were 24 hours ago, one where growth is slowing, earnings are still falling and prices keep on rising," IG's Beauchamp said. "This is not a great environment for stocks, and it looks like we have a way to go before global equities look to be really good value."
Other asset classes also felt Wednesday's policy moves.
US yields continued to diverge, with 2-year Treasury notes up 3.4 basis points to 3.3134% and 10-year Treasury notes falling 1.4 basis points to 3.381%. The dollar index rallied again as it looks to set a new 20-year high, climbing 0.03% to $105.19.
The European Central Bank held an emergency meeting on Wednesday at which it discussed how to stop borrowing costs of heavily indebted eurozone member countries from rising too quickly, particularly those of Italy, Germany, Spain and Portugal - the so-called periphery.
Italy's benchmark 10-year bond yield rose 13 basis points on the day to to 4.05%, having dropped by as much as 30 basis points the day before after the ECB pledged to "accelerate the completion of the design of a new anti-fragmentation instrument" aimed at cooling the pressure on the bond yields of more economically vulnerable member states.
The euro fell against the dollar after the ECB's surprise announcement and slid further on Thursday, dropping 0.34% to $1.04. The British pound slid 0.5% to $1.212 ahead of a rate decision by the Bank of England later in the day.