Stocks pulled back on Thursday as bond yields edged higher, with investors awaiting US inflation data to gauge the Federal Reserve’s future interest-rate decisions.
The Stoxx 600 index in Europe and S&P 500 futures both slipped about 0.2%, following another record high for the main US equity gauge. Ten-year Treasury yields remained above 4%, while the dollar index held steady after an eight-day winning streak.
Expectations for the US consumer price data suggest a further moderation in inflation, supporting the belief that the Fed will continue with its policy easing. However, a stronger-than-expected jobs report for September has led traders to scale back rate-cut expectations.
Bénédicte Lowe, a strategist at BNP Paribas Markets 360, highlighted the potential impact of a strong inflation reading on the Fed’s response. She noted that with equity markets at or near all-time highs, the downside risks increase if inflation picks up from current levels.
Minutes from the Fed’s September meeting revealed support for a 50-basis-point cut, although some officials preferred a more gradual approach. The start of the third-quarter earnings season this week will also be closely watched to assess if profits can sustain the S&P 500’s 20% rally this year.
In individual stock movements, 10X Genomics Inc. saw a significant decline after falling short of revenue expectations, while GXO Logistics Inc. rose on news of a potential sale. GSK Plc gained ground after announcing a settlement related to its Zantac medication, and Deutsche Telekom AG climbed following a share buyback announcement.
Elsewhere, Chinese stocks rose ahead of a finance ministry press conference for insights on fiscal stimulus. Oil prices strengthened above $77 per barrel amid concerns over escalating tensions in the Middle East.
Looking ahead, key events this week include US CPI and initial jobless claims, Fed speeches, and earnings reports from major Wall Street banks.
Market movements as of 9:45 a.m. London time:
– Stoxx Europe 600: -0.2%
– S&P 500 futures: -0.2%
– Nasdaq 100 futures: -0.2%
– Dow Jones Industrial Average futures: -0.1%
– MSCI Asia Pacific Index: +0.6%
– MSCI Emerging Markets Index: +0.6%
Other market updates:
– Currencies: Dollar index unchanged, euro steady at $1.0935, yen up 0.1% to 149.11 per dollar
– Cryptocurrencies: Bitcoin up 0.8% to $60,857.15, Ether up 1.5% to $2,388.87
– Bonds: 10-year Treasury yield stable at 4.08%, Germany’s 10-year yield up two basis points to 2.27%, UK’s 10-year yield up three basis points to 4.22%
– Commodities: Brent crude up 0.7% to $77.15 a barrel, spot gold up 0.3% to $2,615.76 an ounce
This summary was created in collaboration with Bloomberg Automation.
Source: Bloomberg Businessweek. ©2024 Bloomberg L.P.