(Bloomberg) — US futures fell on Tuesday amid caution in global markets ahead of the Federal Reserve interest-rate hike.
Contracts on the S&P 500 and Nasdaq 100 slid, as Walmart Inc. tumbled about 9% in premarket trading after its surprise warning. European retailers and banks also fell on disappointing reports, while energy and mining stocks rallied as European Union countries reached a political agreement to cut their gas use. UBS Group AG dropped more than 7% after reporting weaker-than-expected profit.
Traders are braced for a widely expected 75 basis point Fed rate rise on Wednesday, part of campaign to tackle inflation, as well as corporate reports from the likes of Apple Inc. and Alphabet Inc. EU countries agreed on Tuesday to cut their gas use by 15% through next winter as the prospect of a full cut-off from Russian supplies grows increasingly likely.
Commodities prices have surged on signs of tightness, with European natural gas rising to the highest level in more than four months, while crude and copper also jumped. Treasury yields fell and a dollar gauge rose.
For Katerina Simonetti, an adviser at Morgan Stanley Private Wealth Management, the litany of risks exposes the vulnerability of the 6% rebound in global shares from June lows.
“This is most likely a bear market rally and there are significant risks still facing this market,” she said on Bloomberg Television. “We’re probably going to be seeing a lot of choppiness and potentially some further declines in the market before the year end.”
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Here are some key events to watch this week:
- Alphabet, Apple, Amazon, Microsoft, Meta earnings due this week
- US new home sales, Conf. Board consumer confidence, Tuesday
- IMF’s world economic outlook update, Tuesday
- EU energy ministers emergency meeting, Tuesday
- Fed policy decision, briefing, Wednesday
- Australia CPI, Wednesday
- US GDP, Thursday
- Euro-area CPI, Friday
- US PCE deflator, personal income, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.4% as of 8:23 a.m. New York time
- Futures on the Nasdaq 100 fell 0.5%
- Futures on the Dow Jones Industrial Average fell 0.4%
- The Stoxx Europe 600 rose 0.1%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index rose 0.5%
- The euro fell 1% to $1.0122
- The British pound fell 0.6% to $1.1967
- The Japanese yen was little changed at 136.67 per dollar
Bonds
- The yield on 10-year Treasuries declined five basis points to 2.74%
- Germany’s 10-year yield declined 10 basis points to 0.92%
- Britain’s 10-year yield declined four basis points to 1.89%
Commodities
- West Texas Intermediate crude rose 1.9% to $98.58 a barrel
- Gold futures were little changed
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