European stock futures sank 3% on Thursday tracking a global downturn in sentiment after U.S. Federal Reserve chairman Jerome Powell signalled a March interest rate hike and sustained policy tightening to control surging inflation.

Futures tracking Europe’s top 50 firms plummeted up to 3%. Among regional markets, UK’s FTSE futures fell 1.7% and German DAX futures dropped 2% by 0700 GMT.

Following the Federal Open Market Committee meeting, Powell said the U.S. central bank is likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month.

All three major U.S. stock indexes gyrated wildly overnight, while Asian shares plunged to their lowest in nearly 15 months, short-term U.S. yields hit 23-month highs and the dollar strengthened. [MKTS/GLOB] [.N]

The benchmark STOXX 600 has lost 4% so far this month.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 26, 2022. REUTERS/Staff