US futures rise, dollar steady

Bloomberg

US index futures posted modest gains, Treasuries nursed losses and the dollar was steady as markets remained on edge ahead of the Jackson Hole central bankers’ symposium later this week.
Futures on the the S&P 500 and Nasdaq 100 fluctuated before turning higher after US stocks plunged the most in two months. The 10-year Treasury yield held above 3% and a gauge of the dollar hovered at a five-week high.
Traders are bracing for hawkish talk at the Jackson Hole event after recent comments from Federal Reserve officials convinced many investors the central bank will continue to tighten aggressively into a slowing economy. Some analysts, however, see a risk that Chair Jerome Powell will catch traders off-guard with a more nuanced approach, sparking a fresh relief rally.
“For the moment, global sentiment is both skittish and volatile,” said Richard Hunter, head of markets at Interactive Investor. “There is little cause for optimism on the immediate horizon, with any glimmers of economic hope yet to take hold on a sustainable basis.”
The Stoxx Europe 600 fluctuated near a three-week low after euro-area economic activity declined for a second month, signaling that fears of a recession may already be coming to pass as record inflation saps demand. Energy stocks advanced thanks to a boost for crude oil from the possibility of Opec+ output cuts. The euro hovered near a two-decade through and bond yields edged higher.
The drop in the euro-area Purchasing Managers’ Index presents a dilemma for the
European Central Bank (ECB), which is raising interest rates to curb the hottest inflation in decades, even as uncertainty about the outlook is high and economic momentum fades.
The Fed, meanwhile, is walking a tightrope in trying to contain price pressures while averting recession. Quantitative tightening by the US central bank is set to kick into gear next month, presenting another potential headwind for equities.
“The near-term outlook for equity markets remains challenging,” said Mathieu Racheter, head of equity strategy at Julius Baer. “The impact of quantitative tightening on financial markets have yet to be felt, while the earnings downgrade cycle has just started.”
Elsewhere, Bitcoin wavered and is more than $2,000 off levels that prevailed before a crypto swoon on August 19. UK stocks underperformed the European benchmark after underwhelming manufacturing data. Emerging-market stocks dropped for a fourth day.
Futures on the S&P 500 rise 0.2% as of 6:06 am New York time and futures on the Nasdaq 100 also climb 0.2%.
While futures on the Dow Jones Industrial Average rise 0.2%, the Stoxx Europe 600 was little changed. The MSCI World index falls 0.2%.