The overnight trade saw significant volatility in global markets as investors responded to mixed economic data and central bank announcements.

A weaker-than-expected inflation reading from the European Union, coupled with a surprise interest rate hike from the Bank of England, sparked a sell-off across equities. In the US, the Dow Jones Industrial Average plummeted over 250 points, while the S&P 500 and Nasdaq Composite indexes also fell by at least 1%. The decline was largely driven by concerns about the impact of higher interest rates on economic growth and inflation. The Bank of England’s rate hike, which saw the base rate rise to 4%, marked a shift in policy as the UK seeks to combat rising inflation. Meanwhile, investors in Asia were more cautious, with major markets in China and Japan posting gains despite concerns about a slowdown in global trade. In the US, markets will be closely watched for signs of resilience ahead of a Federal Reserve interest rate decision later this week.