The Dow ( )plunged 880 points, or 2.5%, on Friday. The S&P 500 ( shed 2.7% and the )Nasdaq ( dropped about 3%. The US consumer price index rose by 8.6% in May, raising fears that the )Federal Reserve will have to act even more aggressively to try to tame price rises.
The shockwaves were felt most acutely in Asia on Monday. Japan’s Nikkei ( closed down 3%, and the yen weakened to the lowest level in more than 20 years. The Japanese currency has declined rapidly in recent months because of a strong greenback and ultra-loose Japanese monetary policy. )
The Japanese central bank and government warned in a rare joint statement on Friday that they are concerned about the sharp falls, suggesting a potential intervention by Tokyo to stem the decline.
The yen wasn’t the only Asian currency seeing a steep fall. The Indian rupee fell to an all-time low of 78.2 against the US dollar in early trade.
Elsewhere in Asia, Hong Kong’s Hang Seng ( fell 3.4% on Monday. Korea’s Kospi fell 3.5%. China’s )Shanghai Composite ( was down 0.9%. )
In Europe, France’s CAC 40 ( dropped 2.47% in early trade, while Germany’s )DAX 30 ( was down 2.3%. The )FTSE 100 ( slipped 1.8%, while the pound slipped to $1.22 after new data showed the )UK economy contracting for a second consecutive month in April.
In the US, Dow futures were down 1.9% at 5.20 am ET. S&P 500 futures were down around 2.3%, while Nasdaq futures were down about 2.9%.
“The hangover from Friday’s US CPI data isn’t helped by concern about China walking back some of its economic reopening, or more dire economic data in the UK,” Societe Generale strategist Kit Juckes said in a research note.
A number of neighborhoods in Shanghai faced another temporary lockdown at the weekend, as authorities launched mass testing just days after Covid restrictions were eased for most of its 25 million residents.
Authorities in Beijing’s largest Chaoyang district announced Thursday the closure of all entertainment venues, just days after allowing their reopening.
— CNN’s Nicole Goodkind contributed to this report