(Bloomberg) — US stock futures climbed on Wednesday as some of the investor anxiety over tense US-China ties eased, while Treasuries extended a slide sparked by hawkish Federal Reserve comments.
S&P 500 futures and contracts on the Nasdaq 100 both rose by about 0.4%. Europe’s Stoxx 600 was little changed as investors assessed signs of resilience in the latest company earnings. Societe Generale SA rallied as the French lender outlined new revenue targets and pledged higher profitability. BMW AG dropped after cutting its delivery outlook due to ongoing supply-chain snarls.
US House Speaker Nancy Pelosi completed a visit to Taiwan that has provoked an angry response from China, with markets calmer compared with the wave of anxiety that washed across assets ahead of her arrival. The yen and a dollar gauge were little changed.
Read more: Strategists Fear Pelosi Trip to Have Deeper Global-Market Impact
The two-year Treasury yield added to its advance beyond 3% following a selloff in bonds on Tuesday sparked by Fed officials indicating the central bank has some way to go to curb inflation. That lead traders to trim wagers on policy easing in 2023.
While an immediate concern around US-China tensions may be fading Wednesday, investors still face a host of worries including inflation and how the policy response by central banks to surging prices could hobble global growth. Equities trading doesn’t reflect the headwinds confronting the market, according to Goldman Sachs Group Inc. strategist Sharon Bell.
“There’s a little bit of complacency in there and markets are not fully taking into account the risks,” Bell said in an interview with Bloomberg TV.
MSCI Inc.’s Asia-Pacific equity index slipped 0.2% in a mixed day that included a jump in Chinese technology shares.
In US premarket trading, Airbnb Inc. fell after the home-rental company missed estimates on bookings. Match Group Inc. sank after the parent to dating apps including Tinder, OkCupid and Hinge gave a weak revenue forecast.
Fed Signals
Meanwhile, comments from Fed officials including Mary Daly, Loretta Mester and Charles Evans served to highlight a challenging backdrop of rising borrowing costs, price pressures and slowing economic growth.
San Francisco Fed President Daly said the Fed has “a long way to go” on reaching price stability around a 2% inflation target. Cleveland counterpart Mester said she wants to see “very compelling evidence” that month-to-month price increases are moderating.
Elsewhere, oil traded at about $94 a barrel ahead of an OPEC+ crude production meeting. Gold climbed and Bitcoin held above $23,000.
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What to watch this week:
- OPEC+ meeting on output, Wednesday
- US factory orders, durable goods, ISM services, Wednesday
- BOE rate decision, Thursday
- US initial jobless claims, trade, Thursday
- Cleveland Fed President Loretta Mester due to speak, Thursday
- US employment report for July, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 was little changed as of 10:54 a.m. London time
- Futures on the S&P 500 rose 0.4%
- Futures on the Nasdaq 100 rose 0.4%
- Futures on the Dow Jones Industrial Average rose 0.4%
- The MSCI Asia Pacific Index fell 0.1%
- The MSCI Emerging Markets Index rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.2% to $1.0185
- The Japanese yen was little changed at 133.16 per dollar
- The offshore yuan rose 0.3% to 6.7609 per dollar
- The British pound was little changed at $1.2168
Bonds
- The yield on 10-year Treasuries was little changed at 2.76%
- Germany’s 10-year yield advanced five basis points to 0.86%
- Britain’s 10-year yield advanced two basis points to 1.89%
Commodities
- Brent crude fell 0.9% to $99.66 a barrel
- Spot gold rose 0.3% to $1,765.07 an ounce
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