(Bloomberg) — The Nasdaq 100 Index led a surge in U.S. equity futures and bonds rebounded from Monday’s selloff.
Markets have been gripped by volatility in tech stocks this week and the Nasdaq 100 has fallen 11% from an all-time high. On Tuesday, markets were tilting back to risk on, with the dollar weakening and stocks from Asia and Europe also notching gains.
Shares in Tesla were up 4.4% in premarket trading, while Cathie Wood’s flagship exchange-traded fund Ark Innovation ETF, which has Tesla as its largest holding, gained 4.4%. Both are set to open higher after five straight days of declines.
Investors will be closely watching Treasury sales in the coming days, with the U.S. planning three debt auctions totaling $120 billion. The sales will test appetite for the safest debt after last month’s poorly bid auctions sent shockwaves throughout global markets.
Prospects of accelerating growth have driven up borrowing costs in recent weeks, raising the specter of inflation and unsettling tech stocks with long-term growth horizons.
But Treasury Secretary Janet Yellen offered reassurance Monday, suggesting inflation fears are overblown. She has repeatedly rejected concerns that U.S. fiscal stimulus is excessive given the economy’s signs of recovery, and that run-away inflation could damage the economy.
“I really don’t think that’s going to happen,” she told MSNBC. Inflation before the pandemic “was too low rather than too high,” she noted.
Yellen Says Stimulus Unlikely to Cause Inflation Problem
The U.S. Treasury will offer $120 billion in coming days that will gauge demand amid the largest short bet on U.S. government debt on record. The auctions will kick off with a sale of $58 billion of three-year notes Tuesday.
Elsewhere, China’s CSI 300 equity gauge dropped again after state-related funds stepped in to alleviate an earlier plunge. Bitcoin fluctuated around the $54,000 level after hitting a two-week high on more signs of institutional interest. Oil fluctuated near $65 a barrel.
Here are some key events to watch:
EIA crude oil inventory report is due WednesdayThe U.S. February consumer price index will offer the latest look at price pressures Wednesday.The U.S. government auctions 3-, 10- and 30-year Treasuries this week.The European Central Bank holds its monetary policy meeting and President Christine Lagarde is set to do a briefing Thursday.
Stocks
Futures on the S&P 500 Index advanced 1% as of 10:22 a.m. London time.The Stoxx Europe 600 Index increased 0.4%.The MSCI Asia Pacific Index gained 0.4%.The MSCI Emerging Market Index was unchanged.
Currencies
The Bloomberg Dollar Spot Index sank 0.5%.The euro jumped 0.5% to $1.1904.The British pound gained 0.3% to $1.3869.The onshore yuan strengthened 0.2% to 6.514 per dollar.The Japanese yen strengthened 0.1% to 108.77 per dollar.
Bonds
The yield on 10-year Treasuries fell five basis points to 1.54%.The yield on two-year Treasuries dipped one basis point to 0.16%.Germany’s 10-year yield fell four basis points to -0.31%.Japan’s 10-year yield climbed less than one basis point to 0.127%.Britain’s 10-year yield fell five basis points to 0.707%.
Commodities
West Texas Intermediate crude climbed 1.1% to $65.77 a barrel.Brent crude gained 1.2% to $69.07 a barrel.Gold strengthened 1.2% to $1,703.35 an ounce.
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