Stocks Fall With Doubts Over Fed Pause in Focus: Markets Wrap

(Bloomberg) — Stocks declined as fresh doubts emerged on whether the Federal Reserve has finished tightening policy. The dollar advanced.

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An Asian equity benchmark was set to snap a four-day winning streak as major indexes traded lower. South Korea’s Kospi Index fell over 3% after jumping by the most since 2020 on Monday following a renewed ban on short-selling. Contracts for European and US stocks also slipped.

“Following the stellar rallies across the region yesterday, indexes are giving back some of their gains, with a recovery in bond yields and a firmer US dollar to start the week,” said Jun Rong Yeap, a market analyst at IG Asia Pte.

Traders are now predicting the Fed will lean against the recent easing in financial conditions by saying it will keep its options open on policy. Minneapolis Fed President Neel Kashkari said it’s too soon to declare victory over inflation, despite positive signs that price pressures are easing, and a host of Fed officials — including Chair Jerome Powell — are due to speak over the next few days.

Investors will be parsing results by major companies later Tuesday as the earnings season continues.

UBS Group AG posted a net loss of $785 million in the third quarter, its first quarterly loss in almost six years, as the ongoing absorption of Credit Suisse weighed on the Swiss lender’s performance. Meanwhile, Aramco reported a better-than-expected operating profit and kept its payout to the Saudi government and investors at $29.4 billion.

Treasuries steadied after yields rose across the curve on Monday. Ten-year yields jumped eight basis points as sentiment was dented by a heavy slate of corporate debt sales and traders readied for a series of auctions beginning Tuesday. The dollar gained against all of its Group-of-10 peers.

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“We’re in a trading range probably for the next month or so until we get clear indications on what inflation’s going to really do, core inflation, and what…