(Bloomberg) — US equity futures turned lower with stocks Wednesday as concern over the potential for a global downturn sparked by hawkish central bank lingers.
Contracts on the Nasdaq 100 and the S&P 500 erased an advance to trade little changed.
The Stoxx 600 Index flipped to a loss from a gain. In the premarket, Netflix rose 7.5% after it reported better-than-feared earnings late on Tuesday and said it expects to return to subscriber growth before the end of the year.
Treasuries rose with the dollar, pushing the 10-year yield below 3%.
The euro held its ground near a two-week high against the dollar on the possibility of a bigger-than-expected European Central Bank interest-rate hike Thursday.
Speculation that company earnings will hold up and that the Federal Reserve will avoid very aggressive monetary tightening is giving investors some hope.
Yet the risk of a global downturn and Europe’s energy crisis is keeping investors on edge.
“The fact that companies are showing a certain resilience to the current environment is reassuring market operators who have now started betting on a less aggressive monetary tightening than initially expected,” said Pierre Veyret, a technical analyst at ActivTrades.
“Even if we’re not out of the woods yet, more and more traders now tend to believe the worst is behind for equity markets this year.”
Pessimism is hard for investors to shake after they endured the worst combined first-half losses on stocks and bonds around the world on record, with $8 trillion wiped off the S&P 500 alone.
West Texas Intermediate crude oil slipped below $103 a barrel.
Bitcoin hovered above $23,000 after climbing out of a one-month-old trading range.
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Key events to watch this week:
- Earnings this week include Tesla
- Bank of Japan, European Central Bank rate decisions.
Thursday
- Nord Stream 1 pipeline scheduled to reopen following maintenance. Thursday
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