Markets Face Perfect Storm as Fed Rate Hike Looms

Global markets are facing a challenging combination of factors as they enter the new week. Oil supply risks remain elevated, US inflation is still too high, Treasury yields are near 5%, and the Federal Reserve is widely expected to raise interest rates this week.

The E-mini Dow Futures (DEC6) declined early Monday, with stocks tracking a mix of concerns about oil, inflation, and Treasury yields. OpenAI and Anthropic CEOs called for a deliberate slowdown in frontier AI development, while Nvidia considers investing $10 billion in Anthropic's mega IPO.

Bursa Malaysia began the week below the psychological 1,700 level after Friday's broad sell-off. The Dow finished about 1.6% lower near 52,573, with the S&P 500 dropping about 0.8% near 7,657 and the Nasdaq Composite losing about 0.7% near 26,333.

The Federal Reserve is expected to raise interest rates this week, putting further pressure on markets. The combination of these factors may lead to a volatile trading environment in the coming days.