US equity-index futures fall amid fizzling Fed-pivot talk

Bloomberg

US equity-index futures fall as investors took a pause from a rally driven by bets for less hawkish central banks, and sought more evidence that inflation is moderating.
December contracts on the S&P 500 and Nasdaq 100 dropped 0.9% each after the underlying indexes scaled two-week highs. Treasuries slid across the curve and the dollar rose for the first time in three days. Twitter Inc dropped in New York premarket trading, sliding further below Elon Musk’s offer price.
A growing cohort of money managers is cautioning that expectations for a so-called Federal Reserve pivot are overdone and risk ignoring the economic pain that would underpin such a dovish tilt should policymakers opt for it. With several Fed officials reiterating their focus on reducing inflation, US jobs numbers due Friday and a new earnings-reporting season may provide the next catalysts for markets.
“A dovish pivot requires more evidence of weaker growth and a decisive fall in inflation,” Emmanuel Cau, the head of European equity strategy at Barclays Plc, wrote in a note. “We doubt equities are out of the woods yet.” Europe’s Stoxx 600 halted its best three-day advance since November 2020. The gauge fell 0.7%, trimming some of its 5.3% rally since September 29. Real estate, auto-parts and retail shares slid the most.
In early New York trading, Twitter slipped 0.5% to $51.71, compared with Musk’s offer price of $54.20. The move came after the billionaire revived the troubled acquisition plan at the original price, thus seeking to avoid a protracted legal battle. Tesla Inc. dropped 1.2%.
Earlier, equity markets gained ground across Asia, catching up with overnight moves in the US. Hong Kong stocks posted their best rally since March after a one-day break.
US Treasuries fall across the curve on Wednesday, with the 10-year yield adding as much as 7 basis points. The dollar was 0.5% higher, having fallen more than 1%.
West Texas Intermediate oil futures posted a modest loss, still holding above $86 per barrel. The Opec+ grouping is considering an output cut of as much as 2 million barrels a day, delegates said before the group meets in Vienna.
Meanwhile, investors’ attention remained focused on
Friday’s nonfarm payrolls data, which is expected to show 263,000 jobs were added in September.
“For the market to continue higher, the jobs data will have to be in line with, or short of expectations,” said Lindsey Bell, chief markets and money strategist at Ally.
Futures on the S&P 500 fall 0.9% as of 6:23 am New York time and futures on the Nasdaq 100 also drop 0.9%.
While futures on the Dow Jones Industrial Average fall 1%, the Stoxx Europe 600 also sinks 0.9%. The MSCI World index was little changed.
The Bloomberg Dollar Spot Index rises 0.5% and the euro falls 0.7% to $0.9919.
While the British pound falls 0.8% to $1.1382, the Japanese yen plunges 0.2% to 144.42 per dollar.