Stocks, futures rise as oil’s rally pauses

Bloomberg

Stocks climbed with US equity futures as a selloff in bonds deepened on Tuesday on Federal Reserve Chair Jerome Powell’s signals the central bank will take more aggressive measures to clamp down on inflation.
The Stoxx Europe 600 Index marched higher, led by banks and cyclical stocks like automakers. Futures on the S&P 500 and Nasdaq 100 flipped to gains from losses. Treasury yields continued their ascent after short-dated rates posted one of the biggest daily climbs of the past decade.
Powell said the Fed is prepared to raise interest rates by 50 basis points at the next policy meeting if needed. The central bank hiked by a quarter-point last week and signalled six more such moves this year. The dollar advanced.
Oil’s rally paused, with Russia’s war in Ukraine nearing the one-month mark and no conclusion in sight. There are signs the European Union may
be edging closer to a ban on Russian crude imports to
punish Moscow for its invasion.
The trajectory of bonds is a focal point for investors fretting about a growth slowdown or even a recession. High inflation, stoked by commodity-market disruptions due to the war, has increased pressure on the Federal Reserve and some other key central banks to tighten monetary policy.
“For the long term, 2.3% on the 10-year is not such a high figure at all,” Linda Duessel, senior equity strategist at Federated Hermes Inc., said on Bloomberg Television, referring to US Treasuries. “What spooks the market is when you have very quick moves, such as what we’re having now.”
Derivative traders priced in about 7.5 quarter-point rate hikes at the remaining six Fed meetings this year, effectively making provision for more than one half-point rise.
The Stoxx Europe 600 rises 0.5% as of 8:49 am London time and futures on the S&P 500 also climb 0.3%.
While futures on the Nasdaq 100 climb 0.4%, futures on the Dow Jones Industrial Average also rises 0.4%.
The MSCI Asia Pacific Index rises 1% and the MSCI Emerging Markets Index also surges to 1.1%.
The Bloomberg Dollar Spot Index was little changed and the euro was little changed at around $1.1006.
The Japanese yen falls 0.8% to 120.43 per dollar and the offshore yuan was little changed at 6.3723 per dollar. The British pound rises 0.1% to $1.3186.
While the yield on 10-year Treasuries advanced five basis points to 2.34%, Germany’s 10-year yield advanced three basis points to 0.50% and Britain’s 10-year yield advanced three basis points to as much as 1.66%.
Brent crude falls 0.2% to $115.34 a barrel and spot gold also drops 0.5% to $1,926.60 an ounce.