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Stock futures traded lower Monday in a week that is expected to see the Federal Reserve raise interest rates by another three-quarters of a point in its effort to stamp out inflation.

Contracts linked to the

Dow Jones Industrial Average
fell 201 points, or 0.7%, to 30,721,

S&P 500
futures were down 0.7% and

Nasdaq
futures declined 0.9%.

Stocks in Asia fell Monday. Hong Kong’s

Hang Seng
declined more than 1%, led lower by Chinese stocks such as

Alibaba

(ticker: BABA) and

JD.com

(JD). The

Shanghai Composite
finished the session down 0.4%. European equities also traded lower, with the London Stock Exchange closed for the funeral of Queen Elizabeth II.

Stocks in the U.S. fell Friday and markets declined for the week after hotter-than-expected inflation data, and an earnings warning from

FedEx

(FDX) had investors concerned about what the shipping giant’s warning might mean for the larger global economy.

The Dow fell 4.1% last week, the S&P declined 4.8%, and the Nasdaq dropped 5.5%. The three indexes have finished with losses four of the last five weeks.

The timing of FedEx’s warning wasn’t great with investors already nervous that another aggressive move by the Federal Reserve on interest rates could cause the economy to enter a recession. The central bank has raised interest rates by 75 basis points at each of its last two policy meetings in June and July.

The Fed decision on rates will be announced Wednesday afternoon.

Citi economists expect the Fed to boost rates by 75 basis points, saying that a hike of 100 basis points was possible though not likely.

“A surprisingly large 100bp hike would be one way to send a strong, hawkish message, but we think most Fed officials will judge the potential costs as outweighing the benefits,” the economists said. “Financial conditions broadly tightened significantly following last week’s inflation data and there is not the same need to push against a loosening of conditions that the Fed faced as equity prices rallied over the summer.”

Consumer price data for August, released last week, showed prices rose at an 8.3% annualized rate, higher than the estimate for an 8% increase. That’s a slowdown from July and the second month of declining inflation though inflation has been falling more slowly than expected.

Oil prices fell Monday ahead of the expected monetary policy tightening from the Federal Reserve, and

Bitcoin
 traded below $18,500 to levels last seen toward the end of 2020.

Write to Joe Woelfel at joseph.woelfel@barrons.com