US equity-index futures fell as investors took a pause from a rally driven by bets for less hawkish central banks, and sought more evidence that inflation is moderating.
(Bloomberg) — US equity-index futures fell as investors took a pause from a rally driven by bets for less hawkish central banks, and sought more evidence that inflation is moderating.
December contracts on the S&P 500 and Nasdaq 100 dropped at least 0.9% each after the underlying indexes scaled two-week highs on Tuesday. Treasuries slid across the curve and the dollar rose for the first time in three days. US companies hired at a solid clip in September, suggesting demand for workers remains healthy despite rising economic uncertainty, according to data from ADP Research Institute.
A growing cohort of money managers is cautioning that expectations for a so-called Federal Reserve pivot are overdone and risk ignoring the economic pain that would underpin such a dovish tilt, should policymakers opt for it. With several Fed officials reiterating their focus on reducing inflation, US jobs numbers due Friday and a new earnings-reporting season may provide the next catalysts for markets.
“A dovish pivot requires more evidence of weaker growth and a decisive fall in inflation,” Emmanuel Cau, the head of European equity strategy at Barclays Plc, wrote in a note. “We doubt equities are out of the woods yet.”
Europe’s Stoxx 600 halted its best three-day advance since November 2020. Real estate, auto-parts and retail shares slid the most.
Meanwhile, investors’ attention remains focused on Friday’s nonfarm payrolls data, which is expected to show 263,000 jobs were added in September.
Key events this week:
- Eurozone retail sales, Thursday
- US initial jobless claims, Thursday
- Fed’s Charles Evans, Lisa Cook, Loretta Mester speak at events, Thursday
- US unemployment, wholesale inventories, nonfarm payrolls, Friday
- BOE Deputy Governor Dave Ramsden speaks at event, Friday
- Fed’s John Williams speaks at event, Friday
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Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 1% as of 8:30 a.m. New York time
- Futures on the Nasdaq 100 fell 1%
- Futures on the Dow Jones Industrial Average fell 0.9%
- The Stoxx Europe 600 fell 1%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index rose 0.6%
- The euro fell 0.8% to $0.9911
- The British pound fell 1.2% to $1.1333
- The Japanese yen fell 0.2% to 144.49 per dollar
Cryptocurrencies
- Bitcoin fell 1.7% to $19,989.8
- Ether fell 2.2% to $1,331.95
Bonds
- The yield on 10-year Treasuries advanced seven basis points to 3.70%
- Germany’s 10-year yield advanced seven basis points to 1.94%
- Britain’s 10-year yield advanced 12 basis points to 3.99%
Commodities
- West Texas Intermediate crude rose 0.3% to $86.76 a barrel
- Gold futures fell 0.6% to $1,719.50 an ounce
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