Chinese technology stocks slid for a third day as Tencent Holdings Ltd.’s decision to shut its game streaming service further hurt sentiment in a sector already bogged down by regulatory risks.

Treasuries were mixed and the bond curve remained steeper in the wake of the Fed minutes Wednesday, which outlined plans to pare the central bank’s balance sheet by more than $1 trillion a year alongside interest-rate hikes.

A dollar gauge was in sight of its highest level since 2020. Oil fell, squeezed by plans to release millions of barrels of crude from strategic reserves and China’s demand-sapping virus outbreak.

Markets are grappling with the Fed’s campaign against elevated price pressures, Russia’s grinding war in Ukraine and China’s Covid travails. The lockdown in Shanghai — which recorded more than 21,000 new daily virus cases — has become one of President Xi Jinping’s biggest challenges.

“Stocks have had a little bit of a harder time this week digesting the fact that interest rates are going to be higher” amid a major shift in expectations around monetary policy, Anthony Saglimbene, global market strategist at Ameriprise Financial Inc., said on Bloomberg Television.

Federal Reserve Bank of St. Louis President James Bullard said he prefers boosting the policy rate to 3%-3.25% in the second half of 2022. Chicago Fed President Charles Evans and his Atlanta counterpart Raphael Bostic said they favor raising rates to neutral while monitoring the economy’s performance.

Yield Curve

The steepening in the Treasury yield curve contrasts with the flattening that has vexed markets this year. The two-year rate topped the 10-year last week for the first time since 2019, a possible warning of recession.

“We’re seeing a tactical re-steepening right now but the curve is going to continue to flatten,” Kelsey Berro, fixed income portfolio manager at JPMorgan Asset Management, said on Bloomberg Television. “That’s because the Fed has told us, we’d like to get to neutral expeditiously. On top of that, they may need to tighten beyond neutral. Front-end yields can still go higher.”

Meanwhile, U.S. officials warned the war in Ukraine may last for weeks or even years. European Union countries agreed to ban coal imports from Russia, the first time the bloc’s sanctions have targeted Moscow’s crucial energy revenues.

• Where is the dollar headed next? How will the composition of FX reserves change? Those are the themes of this week’s MLIV survey. Please click here to participate.

Key events to watch this week:

• Reserve Bank of India rate decision Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were steady as of 12:05 p.m. in Tokyo. The S&P 500 rose 0.4%
• Nasdaq 100 futures were little changed. The Nasdaq 100 rose 0.2%
• Japan’s Topix index shed 0.3%
• South Korea’s Kospi index lost 0.2%
• Australia’s S&P/ASX 200 index was 0.5% higher
• Hong Kong’s Hang Seng index declined 0.4%
• China’s Shanghai Composite index fell 0.1%
• Euro Stoxx 50 futures rose 0.9%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro was at $1.0858, down 0.2%
• The Japanese yen was at 123.92 per dollar
• The offshore yuan was at 6.3679 per dollar

Bonds

• The yield on 10-year Treasuries fell one basis point to 2.65%
• Australia’s 10-year bond yield increased six basis points to 2.97%

Commodities

• West Texas Intermediate crude fell 0.5% to $95.60 a barrel
• Gold was at $1,929.16 an ounce, down 0.1%