(Bloomberg) — U.S. equity futures rose Friday as sentiment steadied after worries about tightening monetary policy contributed to the worst slide in American technology shares since 2020 and a drop in sovereign bonds.
Contracts on the S&P 500 and tech-heavy Nasdaq 100 climbed more than 1%, aided by a surge in Amazon.com Inc.
and Snap Inc. in late trading on strong earnings. On Thursday, the Nasdaq 100 shed 4.2% and the S&P 500 fell 2.4% as Facebook owner Meta Platforms Inc. suffered a historic $251 billion rout.
In the Asia Pacific, Australian shares fluctuated and futures for Japan pointed lower.
Traders are waiting to see how Hong Kong performs after a holiday.
Meanwhile, surprisingly hawkish comments from European Central Bank President Christine Lagarde and a Bank of England interest-rate hike highlighted persistent concerns about high inflation.
That sapped sovereign debt: Australian bonds fell following a jump in European yields and renewed selling in U.S.
Treasuries. The euro held a jump and a dollar gauge retreated. West Texas Intermediate oil scaled $90 a barrel for the first time since 2014, stoking price pressures.
The latest turbulence underscores how volatility has become the hallmark of global markets this year.
Investors are trying to come to grips with less favorable monetary conditions just as the economic recovery from the pandemic show signs of moderating.
“The first half this year we are now experiencing a rates shock,” Tracy Chen, portfolio manager at Brandywine Global Investment Management, said on Bloomberg Television.
“If the Fed and BOE and other EM central banks are too aggressive in hiking interest rates, potentially we are going to face kind of a recession risk in the second half, or at least more slowdown in the economy.”
The latest data showed U.S.
service-sector growth pulled back in January to the slowest pace in nearly a year. Meanwhile, U.S. initial jobless claims fell more than expected last week to 238,000 ahead of data on payrolls Friday.
The looming jobs report “is a reminder that expectations for Fed policy are the key influence on this market right now,” wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter.
A hot inflation print next week would “rekindle hawkish Fed concerns,” he added.
For more market analysis, read our MLIV blog.
What to watch this week:
- U.S. payrolls report for January, Friday
- Winter Olympics kick off in China, Russia’s President Vladimir Putin due to attend opening ceremony, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 1.1% as of 8:16 a.m.
in Tokyo. The S&P 500 fell 2.4%
- Nasdaq 100 futures rose 1.8%. The Nasdaq 100 fell 4.2%
- Nikkei 225 futures dropped 0.5%
- Australia’s S&P/ASX 200 index was steady
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro was at $1.1437
- The Japanese yen was at 114.97 per dollar
- The offshore yuan was at 6.3521 per dollar
Bonds
- The yield on 10-year Treasuries advanced six basis points to 1.83%
- Australia’s 10-year bond yield rose six basis points to 1.93%
Commodities
- West Texas Intermediate crude was at $90.16 a barrel
- Gold was at $1,805.44 an ounce
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