US futures retreat, stocks advance; oil extends gain

Bloomberg

US futures retreat amid mixed earnings reports, while stocks caught up with late advances on Wall Street spurred by a sanguine rates outlook. Oil extended an advance.
Contracts on the three major US gauges fell, following Tuesday’s rally after Federal Reserve Chair Jerome Powell refrained from pushing back against investor optimism. Chipotle Mexican Grill Inc. dropped in premarket trading after its results missed estimates. Microsoft Corp. gained, with its market value poised to breach $2 trillion, as analysts raised price targets after it unveiled plans to use artificial intelligence tools to improve online search and browsing.
Earnings beats at energy company Equinor ASA and lender ABN Amro NV boosted the Stoxx Europe 600 Index. A benchmark of Asian shares also rose. Treasury yields and a gauge of the dollar were lower.
Risk sentiment got a boost after Powell highlighted that disinflation has begun. While he repeated that further hikes will likely be needed if the jobs market remains strong, his comments soothed traders who had expected a more aggressive pushback against a loosening in financial conditions following the bumper payrolls report.
“Another hawkish speech goes unheard,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said of Powell’s comments. “Investors focused on the fact that he appeared just as hawkish as he has always been, that he didn’t promise a 50bp hike at next meeting, and that he said that the Fed won’t actively shrink its balance sheet for at least a few years.”
Shares in Adani Enterprises climbed for a second day, after a rout prompted by short seller Hindenburg Research’s scathing report published two weeks ago. Hedge fund and distressed debt investors have begun snapping up Adani company bonds. Ratings firm Moody’s said in a report that Indian banks’ exposure to the Adani Group is not large enough to affect their credit quality.
Elsewhere in markets, oil extended gains after its biggest one-day move since November, helped along by a rebound in demand from China.
Turkey’s stock exchange suspended trading for the first time in 24 years, following a selloff that erased $35 billion from the value of its main equities gauge in the wake of two devastating earthquakes.
The Stoxx Europe 600 rose 0.8% as of 10:07 am London time and S&P 500 futures fell 0.3%. While Nasdaq 100 futures fell 0.3%, futures on the Dow Jones Industrial Average drop 0.2%.
The MSCI Asia Pacific Index rose 0.6% and the MSCI Emerging Markets Index also climbs as much as 0.5%.
While the Bloomberg Dollar Spot Index fell 0.2%, the euro rose 0.2% to $1.0750 and the Japanese yen rose 0.2% to 130.78 per dollar. The offshore yuan fell 0.1% to 6.7912 per dollar and the British pound rose 0.4% to $1.2095
The yield on 10-year Treasuries declined two basis points to 3.65% and Germany’s 10-year yield advanced two basis points to 2.37%. Britain’s 10-year yield was little changed at 3.31%.