(Bloomberg) — Global stocks rallied and haven trades fizzled on Tuesday amid optimism that geopolitical tensions in Ukraine may be easing.
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U.S. futures climbed after Russia announced the start of a pullback of some forces after drills that raised alarm about a possible military assault on its neighbor. Diplomatic efforts are continuing, with German Chancellor Olaf Scholz meeting Russian President Vladimir Putin.
Energy shares underperformed in Europe as oil retreated from the highest since 2014 and natural gas prices dropped on a possible cooling in the crisis. Treasury yields advanced, while the dollar and gold fell. The ruble jumped.
Meanwhile, iron ore tumbled as China ramped up a campaign to stop prices from overheating.
Intel Corp. rose in premarket trading after agreeing to buy Israel’s Tower Semiconductor Ltd. for $5.4 billion. Big U.S. technology companies including Apple Inc., Tesla Inc. and Microsoft Corp. also rose, along with cryptocurrency-exposed stocks as Bitcoin extended its recent rebound back above the $44,000 level.
Delivery Hero SE led gains in Europe, while Glencore Plc jumped to a 10-year high.
Markets have been whipsawed this week as the Ukraine crisis added to existing concerns over high inflation and the withdrawal of stimulus by the Federal Reserve. Investor focus will turn to producer price inflation figures for cues on how aggressive the Fed is likely to be with reining in its monetary policy.
“What we are seeing is a Fed that is reacting to inflationary prints even though many of the pressures on inflation are factors that the Fed really can’t solve,” Kristina Hooper, chief global market strategist at Invesco, said on Bloomberg Television. “So that certainly increases the risks and reduces the clarity.”
Here are some key events this week:
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U.S. PPI, Tuesday
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EIA crude oil inventory report, Wednesday
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FOMC minutes, Wednesday
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China CPI, PPI, Wednesday
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G-20 finance ministers, central bank governors meet, Thursday through Feb. 18
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Cleveland Fed President Loretta Mester, St. Louis Fed President James Bullard speak, Thursday
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U.S. Monetary Policy Forum: speakers including Fed officials Charles Evans, Christopher Waller and Lael Brainard, Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
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Futures on the S&P 500 rose 1.4% as of 7:06 a.m. New York time
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Futures on the Nasdaq 100 rose 2%
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Futures on the Dow Jones Industrial Average rose 1.1%
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The Stoxx Europe 600 rose 1.3%
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The MSCI World index fell 1%
Currencies
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The Bloomberg Dollar Spot Index fell 0.2%
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The euro rose 0.4% to $1.1349
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The British pound rose 0.1% to $1.3542
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The Japanese yen was little changed at 115.65 per dollar
Bonds
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The yield on 10-year Treasuries advanced four basis points to 2.03%
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Germany’s 10-year yield advanced two basis points to 0.30%
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Britain’s 10-year yield declined two basis points to 1.57%
Commodities
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West Texas Intermediate crude fell 3.6% to $92 a barrel
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Gold futures fell 0.9% to $1,853.30 an ounce
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