Stocks, US futures advance as inflation worries ease

Bloomberg

US stock-index futures rise as softer oil prices and a weaker dollar signalled fears about inflation and the pace of monetary tightening are fading.
Futures on the S&P 500 and Nasdaq 100 indexes advanced at least 0.2% each after the underlying gauges capped the first three-day rally since May. Asian semiconductor shares rallied after Samsung Electronics Co reported a better-than-forecast revenue jump. The US two- and 10-year yield curve steepened by 1 basis point though it remained inverted for a third day.
Investors have been whipsawed in the past two weeks between concern over runaway inflation and the potential for a US recession. Even though the minutes of the Federal Reserve’s last meeting showed policymakers’ resolve to continue hiking rates, oil-price declines are calming investors over the pace of tightening needed.
“Global equities bounce as pressure points such as rates, oil and the dollar begin to ease,” Stephen Innes, managing partner at SPI Asset Management, wrote in a note. “Momentum has swung higher, with tech-heavy benchmarks outperforming after South Korea’s largest company, Samsung’s, revenue was better than feared.”
Samsung’s revenue jump assuaged fears about weakening consumer demand and soaring material costs. That sparked a rally in chipmakers, helping MSCI Inc.’s Asia-Pacific share index add more than 1%. In China, however, tech stocks fell after Shanghai reported the most virus infections since late May.
Carmakers in Europe posted some of the biggest gains in the benchmark Stoxx 600 index, which gained for a second day. Overnight gains in US stocks helped both Asia and Europe.
Treasuries fall, with the 10-year yield rising faster than the two-year rate. That reversed the trend of the past few days when the short-end yield had surged amid inflation bets while the long end was capped by slowdown concerns.
The Bloomberg Dollar Spot Index retreated for the first time in five days. The euro has rebounded from levels that took the shared currency to
the brink of parity with the greenback.
Oil languished, with West Texas Intermediate futures on course for a 9% weekly loss, as investors weighed a potential global slowdown against signs of still-tight physical markets.
The Stoxx Europe 600 rises 1.2% as of 10 am London time and futures on the S&P 500 also climb 0.2%.
While futures on the Nasdaq 100 advance 0.4%, futures on the Dow Jones Industrial Average also climb 0.2%. The MSCI Asia Pacific Index advances 1.1% and the MSCI Emerging Markets Index also gains 0.9%.
The Bloomberg Dollar Spot Index falls 0.1% and the euro rises 0.1% to $1.0194.
While the Japanese yen falls 0.1% to 136.12 per dollar, the offshore yuan rises 0.1% to 6.7057 per dollar and the British pound also climbs 0.3% to $1.1962.
The yield on 10-year Treasuries advanced three basis points to 2.96% and Germany’s 10-year yield advanced nine basis points to 1.30%. Britain’s 10-year yield advanced seven basis points to 2.16%.