FX.co ★ US premarket for September 7: US stock market begins to decline

On Thursday, US stock futures opened lower amid concerns over slowing global economic growth and anticipated interest rate hikes by the Fed. The ongoing issues in China also weigh on the markets.

The S&P 500 futures dropped by 0.2%, while the tech-heavy NASDAQ slipped by 0.3%. The Chinese yuan declined to its lowest in 16 years. In Europe, the Stoxx 600 remained largely unchanged after six consecutive days of losses, despite Germany's industrial production in July falling below economists' expectations.

The US dollar rose to a six-month high against several risk assets, including the euro and British pound, as investors remained optimistic about the US's steady economic growth.

While traders remain uncertain about the European Central Bank's imminent monetary policy, recent comments by Andrew Bailey, the Bank of England's governor, questioned the need for further rate hikes in the UK. Bailey currently expects inflation to significantly decrease this year, casting doubt on any rate increase during the bank's upcoming meeting. This greatly affects pound buyers, who had anticipated a firmer stance from the Bank of England until early next year.

Meanwhile, the Chinese yuan dipped amid growing pessimism about the Chinese economy. The currency fell by about 0.2% to 7.3294 against the US dollar and saw a similar decline in the offshore market. The yuan came under pressure after the People's Bank of China set its daily reference rate higher than expected, marking the longest streak since records began.

As for commodities, oil prices decreased after a nine-day rally, marking the longest price recovery period in over four years. Gold prices rebounded from Wednesday's decline.

As for the S&P 500, the pressure on the index has returned, and its upside potential is capped. Bulls need to secure control at $4,469. Only from this level, they can push the price to $4,488. Bulls also should control $4,515 to reinforce the bullish trend. If the index declines due to decreased risk appetite, bulls will have to protect $4,447. A breach of this level may push the index back to $4,427, paving the way to $4,405.