An Asian share index fell more than 2%, the most in over two months. Losses on Nasdaq 100 and European futures were at least 1.5%. China and Hong Kong declines were smaller amid progress on the US-China delisting spat.

The Bloomberg Dollar Spot Index pushed toward the record hit last month as investors sought a haven from spiking volatility. Commodity-linked currencies as well as the yen, the pound and the offshore yuan were under pressure.

Bonds sold off amid a deepening inversion of the US yield curve that underscores expectations of a recession under tightening monetary policy. The US two-year yield, sensitive to expectations around Fed policy, hit 3.45%

Powell in his address last week at the Fed’s Jackson Hole symposium flagged the likely need for restrictive monetary policy for some time to curb high inflation and cautioned against loosening monetary conditions prematurely. He also warned of the potential for economic pain for households and businesses.

Those comments contrast with bets for reductions in US borrowing costs next year as growth slows. The locus for much of the investor angst is the equities market, further undoing a bounce in global shares from the bear-market lows of mid-June. Other risks include China’s slowdown and Europe’s energy crisis.

Powell signalled “once they get to whatever the final hike is, they’re going to stay there for a while,” Charles Schwab & Co chief investment strategist Liz Ann Sonders said on Bloomberg Television. “The market had trouble digesting that.”

Bitcoin broke below the $20,000 level some view as a marker of a deeper slide in investor sentiment. Gold retreated but oil made gains as traders evaluated risks to crude supplies.

The relative resilience in China’s stock market may reflect optimism about a preliminary deal between Beijing and Washington to ease a dispute over reviewing audits of Chinese firms. An agreement is needed to avert the delisting of about 200 Chinese companies from US exchanges. 

Here are some key events to watch this week:

• US consumer confidence, Tuesday
• New York Fed President John Williams due to speak, Tuesday
• ECB Governing Council members due to speak at event Tuesday through Sept. 2
• China PMI, Wednesday
• Euro-area CPI, Wednesday
• Russia’s Gazprom set to halt Nord Stream pipeline gas flows for three days of maintenance, Wednesday
• Cleveland Fed President Loretta Mester due to speak, Wednesday
• China Caixin manufacturing PMI, Thursday
• US nonfarm payrolls, Friday
• The UK leadership ballot closes Friday. Winner announced on 5 September

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 1.1% as of 10:47 a.m. in Tokyo. The S&P 500 fell 3.4%
• Nasdaq 100 futures dropped 1.5%. The Nasdaq 100 shed 4.1%
• Japan’s Topix index fell 2.1%
• Australia’s S&P/ASX 200 index lost 2%
• South Korea’s Kospi dropped 2.3%
• Hong Kong’s Hang Seng index retreated 1%
• China’s Shanghai Composite index was down 0.4%
• Euro Stoxx 50 futures fell 1.7%

Currencies

• The Bloomberg Dollar Spot Index rose 0.5%
• The euro was at $0.9927, down 0.4%
• The Japanese yen was at 138.54 per dollar, down 0.6%
• The offshore yuan was at 6.9258 per dollar, down 0.5%

Bonds

• The yield on 10-year Treasuries rose about six basis points to 3.10%
• Australia’s 10-year yield added 10 basis points to 3.68%

Commodities

• West Texas Intermediate crude was at $93.74 a barrel, up 0.7%
• Gold was at $1,726.88 an ounce, down 0.6% BM