(Bloomberg) — U.S. equity futures rose with stocks as more-tempered commodity prices helped allay concerns about inflation risks. Treasuries advanced.
S&P 500 and Nasdaq 100 contracts signaled a market recovery was gaining momentum, after a bruising week that saw gathering price pressures hit equities. Gains in European stocks were led by banks, while miners fell amid a retreat in some raw-material prices. MSCI Inc.’s Asia-Pacific share gauge advanced more than 1%.
Markets appear to be regaining their equilibrium at the end of their biggest retreat in 11 weeks, with the focus of the benefits of an economic rebound overriding worry about the negative side-effect of inflation, for now. That may help to reinvigorate the reflation narrative of picking value shares tied to economic growth over pandemic stay-at-home favorites.
“Stocks with more attractive valuations and slower growth will do well in a higher-interest rate environment,” according to Louise Dudley, global equities portfolio manager at the international business of Federated Hermes. Expensive growth stocks, by contrast, “are sensitive to higher interest rates,” she wrote in a note to clients.
Treasuries recovered from the prior session’s weakness, as the 10-year yield shaved two basis points to 1.63%.
Iron ore continued its fall from a record amid efforts by China to clamp down on surging prices, with the metal set for the biggest two-day plunge since 2019. Oil erased an earlier decline, paring its weekly loss.
Bitcoin fluctuated around $50,000 after Tesla Inc. Chief Executive Officer Elon Musk said the electric-car maker is suspending purchases using the digital currency.
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These are some of the main moves in markets:
Stocks
Futures on the S&P 500 Index increased 0.7% as of 10:08 a.m. London time.The Stoxx Europe 600 Index advanced 0.5%.The MSCI Asia Pacific Index surged 1.3%.The MSCI Emerging Market Index jumped 0.7%.
Currencies
The Bloomberg Dollar Spot Index fell 0.2%.The euro advanced 0.3% to $1.2123.The British pound climbed 0.1% to $1.4068.The onshore yuan strengthened 0.3% to 6.435 per dollar.The Japanese yen strengthened 0.2% to 109.28 per dollar.
Bonds
The yield on 10-year Treasuries fell two basis points to 1.63%.The yield on two-year Treasuries decreased less than one basis point to 0.15%.Germany’s 10-year yield declined one basis point to -0.13%.Japan’s 10-year yield dipped one basis point to 0.089%.Britain’s 10-year yield sank three basis points to 0.87%.
Commodities
West Texas Intermediate crude gained 1.1% to $64.53 a barrel.Brent crude increased 1% to $67.75 a barrel.Gold strengthened 0.5% to $1,836.50 an ounce.
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