Nasdaq futures signaled further gains in US tech shares after Monday’s rally, while the sector also outperformed in Europe and Asia.
(Bloomberg) — Nasdaq futures signaled further gains in US tech shares after Monday’s rally, while the sector also outperformed in Europe and Asia.
Contracts on US stock gauges climbed, with those on the Nasdaq 100 Index rising 0.4%. Nvidia Corp. gained 1.4% in premarket trading, after an 8% jump on Monday that buoyed tech stocks amid optimism about its earnings due this week.
Treasuries steadied, pausing a selloff that had driven benchmark yields to 16-year highs.
A late surge in Chinese shares boosted sentiment in Asia, with key mainland equity indexes rebounding from oversold levels. Tech led gains in Europe’s Stoxx 600 Index, while the UK’s FTSE 100 Index snapped its longest losing streak since July 2019. SoftBank Group Corp.’s semiconductor unit Arm filed for what is set to be this year’s largest US initial public offering.
Stocks are bouncing after three weeks of losses, with investors focusing on Big Tech and Federal Reserve Chair Jerome Powell’s speech due Friday at the Jackson Hole Economic Policy Symposium. Treasuries pared some of Monday’s slump, when the yield on 10-year inflation-protected Treasuries pushed beyond 2% for the first time since 2009. The yield on 10-year notes without that protection hit a level last seen in late 2007.
Recent data underscoring the resilience of the US economy has supported the case for a soft landing, said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. “This creates an environment in which tech stocks are better-able to prosper, and that wider optimism is spreading throughout global markets.”
The dollar weakened against all of its Group-of-10 peers. The offshore yuan steadied after the People’s Bank of China implemented the strongest fixing on record on the currency as the central bank continues its battle against yuan bears. The one month offshore yuan interbank interest rate jumped to highest since 2018.
Investors are seeking clues on the trajectory of US monetary policy after Fed officials last month lifted rates to a range of 5.25% to 5.5%, the highest level in 22 years. Over 80% of those polled in Bloomberg’s latest Markets Live Pulse survey said Powell’s Jackson Hole speech will reinforce the message of a hawkish hold.
“Each incremental hike that they have from here just raises the risk that we have a much sharper slowdown in 2024 and perhaps even a recession,” Lori Heinel, chief investment officer at State Street Global Advisors, said on Bloomberg Television. “So as long as inflation remains contained, we think that they will take a pause here.”
The speeches from Fed chiefs at the Jackson Hole conference have typically buoyed stocks since the turn of the millennium, data compiled by Bloomberg Intelligence show. But last year, equities slumped 3.2% in the week following Powell’s remarks after he warned of keeping policy restrictive to battle inflation.
Key events this week:
- US existing home sales, Tuesday
- Chicago Fed’s Austan Goolsbee speaks, Tuesday
- Eurozone S&P Global Services & Manufacturing PMI, consumer confidence, Wednesday
- UK S&P Global / CIPS UK Manufacturing PMI, Wednesday
- US new home sales, S&P Global Manufacturing PMI, Wednesday
- US initial jobless claims, durable goods, Thursday
- Kansas City Fed’s annual economic policy symposium in Jackson Hole begins, Thursday
- Japan Tokyo CPI, Friday
- US University of Michigan consumer sentiment, Friday
- Fed Chair Jerome Powell, ECB President Christine Lagarde to address Jackson Hole conference, Friday
Some of the main moves in markets:
- The Stoxx Europe 600 rose 0.8% as of 9:37 a.m. London time
- S&P 500 futures rose 0.3%
- Nasdaq 100 futures rose 0.4%
- Futures on the Dow Jones Industrial Average rose 0.1%
- The MSCI Asia Pacific Index rose 1%
- The MSCI Emerging Markets Index rose 0.7%
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.2% to $1.0917
- The Japanese yen rose 0.4% to 145.66 per dollar
- The offshore yuan fell 0.2% to 7.3013 per dollar
- The British pound rose 0.3% to $1.2789
- Bitcoin fell 0.1% to $26,075.6
- Ether fell 0.4% to $1,664.93
- The yield on 10-year Treasuries declined two basis points to 4.31%
- Germany’s 10-year yield declined three basis points to 2.68%
- Britain’s 10-year yield declined three basis points to 4.70%
- Brent crude fell 0.3% to $84.18 a barrel
- Spot gold rose 0.2% to $1,899.19 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Tassia Sipahutar and Farah Elbahrawy.
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