Global stocks tumble, gold slides after the Fed signaled it could hike rates sooner than expected

• Global stocks slid Thursday after the Fed signaled interest rates may rise earlier than seen.
• Gold sank as the US dollar gained strength on the back of the Fed forecast.
• Brent crude and WTI steadied as oil's recent rally slowed.

Global stocks slid on Thursday morning, as gold prices sank and the dollar strengthened, after the Federal Reserve signaled a rise in US interest rates could come sooner than expected.

US stock futures pointed to a lower open ahead, following losses for the major indexes in the wake of the news. Dow Jones futures were last down 0.46% at 4.55 a.m. E.T., while S&P 500 futures dipped 0.49%, and Nasdaq futures fell 0.69%.

The FOMC's latest outlook showed more Fed officials are expecting interest-rate rises in 2023, when at its last meeting, no hikes were projected until after that year. Markets interpreted this as a sign the US central bank might be open to letting inflation heat up to help the US economy recover from the pandemic.

"While not a full turn away from 'transitory', it was a clear signal that the Fed is open to the idea that some aspects of the recent price increases can be more permanent," Jim Reid, research strategist at Deutsche Bank, said in a note.

"This was as hawkish as they could have possibly gone at this stage within realistic expectations," he said.

Also seen as important was that for the first time, Fed officials discussed tapering, or slowing down, its multi-trillion-dollar asset-purchase program, brought in to help the financial system during the COVID-19 crisis.

Yields on the five-year Treasury note, which are highly sensitive to switches in Fed policy, logged the most volatility. The yield jumped to as much as 0.91% from 0.78% immediately before the announcement and closed the day with an 11-basis point increase. By Thursday, it was holding steady around 0.886%.

The US dollar moved higher, while gold prices stumbled by almost 3% on Thursday morning. The metal was last down 2.4%, trading at $1,806.83 an ounce.

"The Treasury and foreign-exchange markets were the main drivers against gold prices following the FOMC decision," said Thomas Westwater, an analyst at DailyFX. "Given the large drop, bulls may need to wait for more hands to shake out before attempting to make a decisive move higher. That said, price may consolidate in the coming days before the next directional move."

Oil prices steadied on Thursday, broadly flat after Brent crude broke a five-day rally on Wednesday. Brent was last down 0.03%, trading at 74.37 per barrel, while WTI was unchanged, trading at $72.15 per barrel.

European stock markets followed their US counterparts lower. Frankfurt's DAX was last down 0.09%, the FTSE 100 in London slipped by 0.51%, and the Euro Stoxx 50 fell by 0.18%.

Asian markets closed out another mixed session. The Japanese Nikkei 225 lost 0.93% while Hong Kong's Hang Seng index gained 0.19% and China's Shanghai Composite, which fell earlier in the week on the back of political tensions between China and NATO, regained strength and inched 0.21% higher.