Tech Leads Rebound in U.S. Futures; Oil Advances: Markets Wrap

(Bloomberg) -- Technology shares led a rebound in U.S. equity futures and stocks on Wednesday as focus turned to positive earnings and signs of economic recovery from the pandemic.

Contracts on the Nasdaq 100 outperformed after tumbling on Tuesday, getting a slight boost from data showing U.S. private employers added the most jobs in seven months. Equity investors appeared to shrug off inflation fears that had spooked markets a day earlier, even as fresh evidence of rising prices emerged. A gauge of commodities hit a decade high as copper rallied back above $10,000 a ton and oil topped $66 a barrel.

Positive earnings results in Europe helped boost the Stoxx 600 Index, with shares of Hugo Boss AG climbing after first quarter sales beat analyst estimates, while Novo Nordisk A/S gained after the drugmaker raised its profit and sales forecasts for the year. The dollar and Treasuries were steady.

Stocks are regaining their footing after Treasury Secretary Janet Yellen rattled markets on Tuesday with comments that interest rates may have to rise moderately to keep the economy from overheating, though she later softened the remark. Coupled with stock valuations near the highest in two decades, it was enough to deliver the worst day for the Nasdaq 100 since March, even as the Federal Reserve has assured markets that interest rates will remain at current lows throughout the recovery.

“The market’s focus will still be on growth restoration and how Covid develops over time,” said Cecilia Chan, HSBC Asset Management Asia-Pacific chief investment officer, on Bloomberg Television. She downplayed concerns about inflation and added that “the central bank will remain dovish.”

Elsewhere, Asian stocks were mixed. India’s shares and bonds gained after the central bank approved 500 billion rupees ($6.8 billion) of liquidity to banks to support lending to vaccine makers, hospitals and providers of health services.

Here are some key events to watch this week:

• Chicago Fed President Charles Evans gives a virtual speech at an event hosted by Bard College on Wednesday. Cleveland Fed President Loretta Mester gives a virtual speech to the Boston Economic Club
• Bank of England rate decision Thursday
• The April U.S. employment report is released on Friday

These are some of the main moves in markets:

Stocks

• Futures on the S&P 500 Index gained 0.4% as of 8:22 a.m. New York time.
• The Stoxx Europe 600 Index climbed 1.5%.
• The MSCI Asia Pacific Index decreased 0.2%.
• The MSCI Emerging Market Index dipped 0.2%.

Currencies

• The Bloomberg Dollar Spot Index was little changed.
• The euro fell 0.1% to $1.2003.
• The British pound jumped 0.2% to $1.3914.
• The onshore yuan was little changed at 6.475 per dollar.
• The Japanese yen was little changed at 109.30 per dollar.

Bonds

• The yield on 10-year Treasuries gained two basis points to 1.61%.
• The yield on two-year Treasuries rose one basis point to 0.16%.
• Germany’s 10-year yield rose two basis points to -0.22%.
• Britain’s 10-year yield jumped three basis points to 0.826%.
• Japan’s 10-year yield was unchanged at 0.097%.

Commodities

• West Texas Intermediate crude increased 1.2% to $66.49 a barrel.
• Brent crude gained 1.3% to $69.75 a barrel.
• Gold weakened 0.1% to $1,777.37 an ounce.

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