U.S. equity-index futures advanced as investors wagered that the Federal Reserve will maintain monetary support in coming months while a rebound in the world’s biggest economy stokes inflation fears.
Contracts on the S&P 500 and Nasdaq 100 gauges pointed to gains after U.S. stocks closed mixed on Friday. The dollar was steady and Treasuries edged higher. Bitcoin advanced above $35,000 following another weekend of big swings. The Stoxx Europe 600 fluctuated before turning lower amid low volumes, with German, Danish, Norwegian and Swiss markets closed for holidays.
China’s crackdown on commodities speculation weighed on raw-material prices, with steel dropping as much as 6% and iron ore tumbling by close to the daily limit. Bloomberg’s industrial metals subindex declined for a fourth day to a one-month low.
Implied volatility for major global indexes remains subdued, suggesting investors aren’t pricing in a surprise from the Fed in the next six months. While market-based gauges of inflation expectations have declined recently, concerns linger that the post-pandemic recovery could stoke price pressures, and some countries also face Covid-19 spikes. Robust corporate earnings, especially in Europe, are underpinning stock prices.
“It’s going to be a very mixed market over the next several months until we get more information on what’s really going to happen with inflation and how the stimulus in the U.S. affects spending there, but also how the coronavirus really progresses,” JoAnne Feeney, a partner at Advisors Capital Management LLC, said in a Bloomberg TV interview.
WTI crude climbed above $64 a barrel, though it pared some of the advance after Iran agreed to extend a key nuclear-monitoring pact with United Nations inspectors, setting the Persian Gulf country up to revive an agreement that could enable it to resume oil exports.
Here are some events this week week:
Consensus by CoinDesk brings prominent crypto voices together to discuss NFTs, exchanges and the role of central banks. Fed Governor Lael Brainard and Bridgewater founder Ray Dalio will participate. Through May 27.Bank of Indonesia rate decision Tuesday, Reserve Bank of New Zealand policy decision Wednesday, Bank of Korea rate decision Thursday.CEOs of the largest U.S. banks, including JPMorgan and Goldman Sachs, will testify before lawmakers in the Senate Banking and House Financial Services committees Wednesday.U.S. initial jobless claims, GDP, durable goods, pending home sales, Thursday.
These are some of the main moves in markets:
Futures on the S&P 500 rose 0.5% as of 8:25 a.m. New York timeFutures on the Nasdaq 100 rose 0.8%Futures on the Dow Jones Industrial Average rose 0.3%The Stoxx Europe 600 fell 0.1%The MSCI World index was little changed
The Bloomberg Dollar Spot Index was flatThe euro rose 0.2% to $1.2210The British pound was little changed at $1.4136The Japanese yen was little changed at 108.90 per dollar
The yield on 10-year Treasuries declined one basis point to 1.61%Germany’s 10-year yield was little changed at -0.14%Britain’s 10-year yield declined two basis points to 0.81%
West Texas Intermediate crude rose 1.2% to $64 a barrelGold futures rose 0.3% to $1,885 an ounce.