(Bloomberg) — US stock futures dipped slightly following the S&P 500’s 41st record close of the year. Treasuries and the dollar remained stable.
Contracts for the S&P 500 indicated a 0.3% decline for the index, while Europe’s Stoxx 600 index also slipped. SAP SE faced losses after reports of a US investigation into potential overcharging of government agencies by German software developers and other companies over the past decade.
Investors are seeking new catalysts after last week’s Federal Reserve interest rate cut, which boosted risk appetite. The latest policy actions from China on Wednesday have not had a significant impact on markets outside of Asia as concerns linger about whether these measures will effectively support the country’s struggling economy.
Central banks are in the spotlight in Europe, with Sweden’s Riksbank cutting interest rates and hinting at further reductions in the near future. The European Central Bank is also expected to make a policy decision soon, with traders already pricing in a potential cut in October. Comments from ECB Governing Council member Klaas Knot suggesting gradual easing in the near future have further fueled speculation.
Nvidia Corp’s gains propelled US equities to a new high on Tuesday, but a sharp drop in the Conference Board’s consumer sentiment index, the largest since August 2021, initially weighed on markets. The report highlighted concerns about a slowdown in the labor market, while weaker-than-expected manufacturing data added to the unease.
“The decline in job availability perceptions was significant,” said Carl Weinberg, chief economist at High Frequency Economics. “This will send a warning signal to financial markets about the state of the economy.”
Market participants have increased their bets on further Fed rate cuts by the end of the year, with expectations for at least one more significant cut after the latest data. Investors are eagerly awaiting comments from Fed Chair Jerome Powell on Thursday and the release of the Fed’s preferred inflation metric on Friday for more insight into future policy moves.
China took additional steps to stimulate its economy by reducing the interest rate on one-year policy loans, following a comprehensive stimulus package announced earlier. This move came after Chinese stocks hit a five-year low, reflecting ongoing concerns about deflationary pressures, weak consumption, and a prolonged property market downturn.
Key events this week include:
- ECB President Christine Lagarde’s speech on Thursday
- US economic data releases on Thursday, including jobless claims, durable goods orders, and revised GDP figures
- Fed Chair Jerome Powell’s remarks at the US Treasury Market Conference on Thursday
- China’s industrial profits report on Friday
- Eurozone consumer confidence data on Friday
- US personal consumption expenditure and University of Michigan consumer sentiment figures on Friday
Market movements:
Stocks:
- Stoxx Europe 600 down 0.2% as of 8:51 a.m. London time
- S&P 500 futures down 0.2%
- Nasdaq 100 futures down 0.3%
- Dow Jones Industrial Average futures down 0.2%
- MSCI Asia Pacific Index flat
- MSCI Emerging Markets Index up 0.3%
Currencies:
- Bloomberg Dollar Spot Index stable
- Euro unchanged at $1.1189
- Japanese yen down 0.4% to 143.86 per dollar
- Offshore yuan down 0.2% to 7.0224 per dollar
- British pound down 0.2% to $1.3386
Cryptocurrencies:
- Bitcoin down 0.7% to $63,800.46
- Ether down 1.1% to $2,622.75
Bonds:
- 10-year Treasury yield stable at 3.74%
- Germany’s 10-year yield stable at 2.15%
- Britain’s 10-year yield stable at 3.93%
Commodities:
This article was created with the help of Bloomberg Automation.
–With contributions from Richard Henderson, Zhu Lin, and Winnie Hsu.
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