European stocks open downward after Fed issues a recession warning

• Fed Chair Jay Powell told US senators that a recession is “certainly a possibility”.
• The possibility of a recession decreased the price of Brent oil by 1.6% to $110 a barrel.
• regional Stoxx 600 index fell 0.6%, while the FTSE 100 index fell 0.9% and Germany’s Dax index fell 0.4%.

As markets processed statements from the Federal Reserve that a recession is “certainly a possibility” and awaited statistics on the condition of the European economy, European stocks declined on Thursday morning.

Read More: Jay Powell tries to calm recession fears but warns about inflation

In morning trade, the regional Stoxx 600 index fell 0.6%, while the FTSE 100 index fell 0.9% and Germany’s Dax index fell 0.4%.

Fed Chair Jay Powell told US senators on Wednesday that it was becoming increasingly difficult for the central bank to combat inflation while still sustaining a robust labour market.

Despite reassuring markets that the US economy is robust, Powell’s remarks contributed to a decline in US stocks on Wednesday evening, with the S&P 500 ending the day 0.1 percent lower. Futures tracking the S&P 500 were down 0.15 percent on Thursday morning.

On Wednesday, energy equities were among the US companies suffering losses. The possibility of a recession decreased the price of Brent oil futures, the worldwide benchmark, by 1.6% to $110 a barrel.

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The Hang Seng index in Hong Kong rose 1.6% after Chinese state media news of prolonged tax exemptions for owners of electric vehicles boosted the sector’s equities. The Topix index was unchanged.