MONDAY – The Dow Jones Industrial Average declined on Monday as surging interest rates and foreign currency turmoil pressured markets.

The British pound dropped to a record low on Monday against the U.S. dollar. Sterling at one point fell 4% to an all-time low of $1.0382. The Federal Reserve’s aggressive hiking campaign, coupled with U.K.’s tax cuts announced last week has caused the U.S. dollar to surge. The euro hit the lowest vs. the dollar since 2002. A surging greenback can hurt the profits of U.S. multinationals and also wreak havoc on global trade, with so much of it transacted in dollars.

Traders will be closely watching the S&P 500 on Monday for any break below its bear market low. The S&P’s low close for the year in June was 3,666.77. It closed Friday at 3,693.23 after trading briefly below that close. The benchmark’s intraday low for the year is 3,636.87. Any trade below those levels could drive more selling in the market.

On Friday, stocks ended a brutal week with the blue-chip Dow finding a new intraday low for the year and closing lower by 486 points. The broad-market S&P 500 temporarily broke below its June closing low and ended down 1.7%. The tech-heavy Nasdaq Composite lost 1.8%.

Another super-sized rate hike by the Federal Reserve last week was the catalyst for the latest leg downward in markets. The central bank indicated it could raise rates as high as 4.6% before pulling back. The forecast also shows the Fed plans be aggressive this year, hiking rates to 4.4% before 2022 ends.

Bond yields soared after the Fed enacted another rate hike of 75 basis points. The 2-year and 10-year Treasury rates hit highs not seen in over a decade. On Friday, Goldman Sachs slashed its year-end target for the S&P 500 to 3,600 from 4,300.