US futures rise with stocks on Thursday as investors shrugged off growth warnings from the bond market. Oil bounced back from the lowest level in almost six months.
Contracts on both the S&P 500 and the Nasdaq 100 pushed higher, suggesting the tech-heavy Nasdaq will extend an advance of 19% from its June 16 low. Gains in the Stoxx Europe 600 Index were led by retailers, leisure and technology firms, alongside an advance in shares of Chinese tech companies.
Equities are proving resilient to heightened bond market anxiety and an inverted Treasury yield curve flashing warnings on economic risks, as the S&P 500 climbs back towards the highest level in two months.
But a global wave of monetary tightening risks upending those gains. The Bank of England unleashed its first half-point hike since 1995 in an effort to control inflation, joining some 70 other institutions around the world moving rates up in outsized steps.
“There’s an intense tug-of-war happening in the economy and markets,” said Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors. “On one side, you have a narrative that reasonable growth is going to support continued inflation pressure and keep the Fed hiking. The other narrative is that slowing growth is going to ease inflation and allow the Fed to stop hiking.”
Treasuries slipped, taking the US 10-year yield to 2.72% as Federal Reserve officials indicated they were resolute on aggressive hikes to cool inflation, dashing market hopes they were ready to embark on a shallower rate path.
Oil steadied after erasing an earlier loss as investors weighed weaker US gasoline demand and rising inventories against a token supply increase from Opec+. Gold advanced and Bitcoin oscillated near $23,000.
Among individual stock moves, Glencore Plc shares fell as much as 2% as its capital return plans overshadowed solid first-half results.
US-China tension remains among the uncertainties clouding the outlook. Taiwan braced for the Chinese military to start firing in exercises being held around the island in response to US House Speaker Nancy Pelosi’s visit.
Futures on the S&P 500 rose 0.2% as of 7:33 am New York time and futures on the Nasdaq 100 also climb 0.3%.
While futures on the Dow Jones Industrial Average rose 0.1%, the Stoxx Europe 600 rose 0.5%. The MSCI World index rose 0.3%.
The Bloomberg Dollar Spot Index was little changed and the euro rose 0.1% to $1.0179
While the British pound fell 0.5% to $1.2088, the Japanese yen fell 0.3% to 134.23 per dollar. The yield on 10-year Treasuries advanced one basis point to 2.72% and Germany’s 10-year yield declined three basis points to 0.84%.