BEIJING (AP) -- Global stock markets and Wall Street futures declined Tuesday amid gloom about weaker global economic growth as central banks raise interest rates to cool inflation.
London and Frankfurt opened lower. Shanghai, Tokyo and Sydney retreated. Oil prices edged lower.
Markets are sliding after the U.S. Federal Reserve raised its key lending rate last week and the European Central Bank said more rate hikes are ahead. That fueled investor fears central bankers might be willing to cause a recession to fight inflation that is at multi-decade highs.
"The tone in markets reflects a cloudy outlook for the global economy," Anderson Alves of ActivTrades said in a report.
In early trading, the FTSE in London fell 0.7% to 7,311.82. The DAX in Frankfurt lost 0.9% to 13,812.03 and the CAC 40 in Paris tumbled 1.1% to 6,403.95.
On Wall Street, the future for the benchmark S&P 500 index was off 0.6%. That for the Dow Jones Industrial Average lost 0.4%.
On Monday, the S&P 500 fell 0.9% for its fifth daily decline as communications services stocks, technology companies and retailers retreated.
The index is sliding after the Fed said last week that rates might have to stay elevated longer than previously forecast. It is down about 20% this year with less than two weeks left in 2022.
The Dow Jones Industrial Average fell 0.5%. The Nasdaq composite lost 1.5%.
In Asia, the Nikkei 225 in Tokyo tumbled 2.5% to 26,568.03 after Japan's central bank, which has avoided joining the Fed and other central banks in raising rates, widened the range in which government bond yields will be allowed to fluctuate. That will allow market interest rates to edge higher.
The Shanghai Composite Index lost 1.1% to 3,073.76 after the World Bank cut its forecast of China's economic growth this year to 2.7% from its June outlook of 4.3%. The bank cited repeated shutdowns of major cities to fight COVID-19 outbreaks.
The Hang Seng in Hong Kong sank 1.3% to 19,094.80 and the Kospi in Seoul lost 0.8% to 2,333.29.
Sydney's S&P-ASX 200 fell 1.5% to 7,024.03 while India's Sensex gained 0.8% to 61,806.19. New Zealand and Southeast Asian markets retreated.
The Fed raised its short-term lending rate last week by one-half percentage point in its seventh increase this year. That dashed investor hopes the U.S. central bank might ease off rate hike plans due to data showing economic activity cooling.
The federal funds rate stands at a 15-year high of 4.25% to 4.5%. The Fed forecast that it will reach a range of 5% to 5.25% by the end of 2023. The forecast doesn't call for a cut before 2024.
Investors were looking ahead to U.S. economic reports this week for an update on the path of inflation. It has declined from its 9.1% high in June but still stood at 7.1% in November.
The National Association of Realtors reports November home sales on Wednesday. Also Wednesday, the Conference Board releases its consumer confidence report for December.
On Friday, the U.S. government will report November consumer spending. The report is watched by the Fed as a barometer of inflation.
In energy markets, benchmark U.S. crude shed 55 cents to $74.83 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trading, sank 65 cents to $79.15 per barrel in London.
The dollar declined to 132.41 yen from Monday's 136.99 yen. The euro gained to $1.0619 from $1.0604.