US futures, Europe stocks swing on growth fears: markets wrap

Spot gold fell 0.3% to $1 990.10 an ounce.
Image: Qilai Shen/Bloomberg

US stock-index futures and European equities fluctuated as a worsening war in Ukraine and central banks’ inflation-taming plans raised the prospect of a plunge in global growth.

June contracts on the S&P 500 and Nasdaq 100 indexes slipped at least 0.2% each in a volatile session. The Stoxx 600 gauge surrendered early gains as a selloff in technology stocks in Asia extended to Europe. Treasuries and the dollar advanced amid continued nervousness over commodity-price spikes. Oil rebounded and the ruble extended its recovery.

Sporadic gains in the equity market are getting wiped out quickly, with the Ukraine conflict boosting inflation and threatening to curb global growth. On Thursday, the European Central Bank chose inflation fight over supporting growth, leaving investors with little risk appetite save for dip-buying in beaten-down equities.

“The biggest risk is inflation,” said Fiona Cincotta, senior market analyst at City Index. “Even though central banks will try and rush to get through as much tightening as possible in the first half of the year, I think looking further out, they’re going to struggle if growth really starts to take a hit.”

Trading in Asia reflected overnight losses in the US market. An MSCI Inc. gauge of the region’s stocks capped its fourth consecutive weekly decline. A technology gauge in Hong Kong slumped more than 6% after the US identified five Chinese firms that could be delisted. Chinese stocks traded in the US had their worst day since 2008 Thursday amid renewed regulatory concerns.

Oil is on track for its biggest weekly loss since November as its searing gains faltered. US President Joe Biden is expected to call for an end to normal trade relations with Russia, clearing the way for increased tariffs on the country’s imports.

The latest evidence of inflationary pressure snapped fledgling rallies across global markets as hopes of progress in talks between Russia and Ukraine faded. The data compounded investors’ concerns about the risks to the global economy from the conflict-driven surge in commodity markets over the past couple of weeks.

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 was little changed as of 8:34 a.m. London time
  • Futures on the S&P 500 fell 0.2%
  • Futures on the Nasdaq 100 fell 0.3%
  • Futures on the Dow Jones Industrial Average fell 0.2%
  • The MSCI Asia Pacific Index fell 1.7%
  • The MSCI Emerging Markets Index fell 1.2%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2%
  • The euro was little changed at $1.0979
  • The Japanese yen fell 0.6% to 116.85 per dollar
  • The offshore yuan was little changed at 6.3325 per dollar
  • The British pound was little changed at $1.3076

Bonds

  • The yield on 10-year Treasuries marginally higher at 1.98%
  • Germany’s 10-year yield declined one basis point to 0.26%
  • Britain’s 10-year yield was little changed at 1.52%

Commodities

  • Brent crude rose 1.6% to $111.08 a barrel
  • Spot gold fell 0.3% to $1 990.10 an ounce
© 2022 Bloomberg

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