(Bloomberg) — Stocks and US futures were mixed on Tuesday amid caution in global markets ahead of the Federal Reserve interest-rate hike.
European energy and mining stocks rallied with oil and metals, while retailers and banks fell. UBS Group AG dropped more than 5% after reporting weaker-than-expected profit, while Walmart Inc. tumbled in US premarket trading on its surprise warning and Alibaba Group Holding Ltd. jumped amid plans to seek a primary listing in Hong Kong.
Traders are braced for a widely expected 75 basis points 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. They’re also assessing risks including ongoing disruptions to European gas supplies from Russia and China’s Covid curbs and property woes.
Commodities prices are surging as signs of tightness outweigh economic concerns. European natural gas rose to the highest level in more than four months, while crude and copper jumped. Energy ministers from the European Union’s 27 member states are meeting in Brussels to wrangle over backing a proposal from the European Commission to regulate consumption.
Treasury yields and a dollar gauge were little changed.
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
- The Stoxx Europe 600 was little changed as of 10:40 a.m. London time
- Futures on the S&P 500 fell 0.3%
- Futures on the Nasdaq 100 fell 0.3%
- Futures on the Dow Jones Industrial Average fell 0.4%
- The MSCI Asia Pacific Index fell 0.6%
- The MSCI Emerging Markets Index fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.4% to $1.0178
- The Japanese yen was little changed at 136.58 per dollar
- The offshore yuan fell 0.1% to 6.7622 per dollar
- The British pound fell 0.2% to $1.2014
Bonds
- The yield on 10-year Treasuries declined two basis points to 2.77%
- Germany’s 10-year yield declined five basis points to 0.97%
- Britain’s 10-year yield declined two basis points to 1.92%
Commodities
- Brent crude rose 1.4% to $106.65 a barrel
- Spot gold was little changed
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