(Bloomberg) — U.S. futures edged lower on Monday, and commodities tumbled as investors weighed concerns about a pullback in stimulus and a resurgence in the fast-spreading delta virus variant.
Contracts on the S&P 500 Index were modestly down, and the Stoxx 600 Index traded little changed as gains in technology firms offset declines in energy shares and miners. Crude oil plunged to the lowest in three weeks on concern the delta virus strain will hamper demand growth.
Precious metals also sold off, with gold touching the lowest since March before paring losses. Silver dropped to its lowest since November. Strong U.S. payrolls data on Friday raised the prospect of higher rates, which would make precious metals less attractive relative to other assets.
Read: Gold Claws Back Some Ground After Early Morning Flash Crash
Asian stocks were mixed, as shares rose in Hong Kong and China and fluctuated in South Korea. The U.S. 10-year Treasury yield slipped to 1.28%, while the dollar drifted. Chinese bond yields gained after inflation data came in above expectations.
Friday’s strong payrolls report, as well as comments from Dallas Fed President Robert Kaplan, have fanned expectations that the Federal Reserve may soon start paring back its massive monetary stimulus. That comes as the rampaging delta variant could lead to a slower economic recovery and a tight labor market, Kaplan warned. Also in the mix are rising price pressures, with U.S. inflation data this week a key marker for investors ahead of the Jackson Hole symposium later this month.
“You have these concerns that if the economy is growing very, very strongly then that might bring forward the tightening or the tapering by the Fed,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, said on Bloomberg Television. “There is a good chance they might announce that tapering in September and it would start later this year.”
Elsewhere, Chinese technology shares remained under pressure amid concerns about Beijing’s crackdown. Bitcoin rose to around $45,000.
Here are some key events to watch out for this week:
Atlanta Fed President Raphael Bostic; Richmond Fed President Tom Barkin; Cleveland Fed President Loretta Mester; Kansas City Fed President Esther George among Fed speakers through the weekThe U.S. consumer price index on Wednesday is forecast to show prices increased again in JulyOPEC Monthly Oil Market Report due Thursday
For more market analysis read our MLIV blog.
These are the main moves in markets:
Stocks
Futures on the S&P 500 fell 0.1% as of 6:08 a.m. New York timeFutures on the Nasdaq 100 were little changedFutures on the Dow Jones Industrial Average fell 0.2%The Stoxx Europe 600 was little changedThe MSCI World index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1759The British pound rose 0.1% to $1.3886The Japanese yen was little changed at 110.15 per dollar
Bonds
The yield on 10-year Treasuries declined two basis points to 1.28%Germany’s 10-year yield declined one basis point to -0.47%Britain’s 10-year yield declined two basis points to 0.59%
Commodities
West Texas Intermediate crude fell 4.1% to $65.49 a barrelGold futures fell 1% to $1,746.30 an ounce
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