(Bloomberg) — U.S. futures fell while Treasury bonds erased some of the previous day’s gains, as escalating tensions in the Middle East put markets in a wait-and-see mode.
Most read from Bloomberg
With traders awaiting Israel’s response to a barrage of missiles from Iran, and Brent crude above $75 a barrel, geopolitical fear has replaced optimism about an easing of central bank policy as the main engine for the market. The escalation in the region prompted a flight to safety on Tuesday and sent Wall Street’s fear gauge – the VIX – to a key level that usually signals more market swings are on the way.
Futures on the S&P 500 fell 0.2% and the European stock benchmark erased earlier gains. Ten-year Treasury yields rose three basis points to 3.76%, up from a low of 3.69% on Tuesday, as demand for ports fueled demand for government bonds. The dollar was flat.
“There is clearly a lot of uncertainty,” Anna Rosenberg, head of geopolitics at Amundi Asset Management, told Bloomberg TV. “Nonetheless, I think the market is still largely operating on the basic expectation that it will remain more or less contained and not spiral into all-out war. And I think that’s the right thing to do at this time.”
Listen and follow The Big Take on Apple Podcasts, Spotify or wherever you get your podcasts
In company news, JD Sports Fashion Plc fell after reporting results and after Nike Inc. reported a decline in quarterly sales after the closing of the US market.
Oil producers cushioned falls in the main European index as oil rose after Israel vowed to retaliate for Tehran’s ballistic missile attack. The serious escalation of hostilities has fueled fears of war in the Middle East.
Meanwhile, Hong Kong-listed Chinese shares rose the most in almost two years as Beijing followed other major cities in relaxing home buying rules. The massive stimulus efforts announced by Chinese leaders last week have boosted local assets and helped markets abroad.
Main events this week:
-
S&P Global Manufacturing PMI on Wednesday
-
Fed speakers include Thomas Barkin of Richmond, Beth Hammack of Cleveland, Alberto Musalem of St. Louis and Fed Governor Michelle Bowman on Wednesday
-
U.S. Nonfarm Payrolls, Friday
Some of the major moves in the markets:
Stocks
-
S&P 500 futures fell 0.2% at 6:48 a.m. New York time
-
Nasdaq 100 futures fell 0.1%
-
Futures on the Dow Jones Industrial Average fell 0.3%
-
The Stoxx Europe 600 had changed little
-
The MSCI World Index fell 0.1%
Currencies
-
The Bloomberg Dollar Spot Index was little changed
-
The euro was unchanged at $1.1068
-
The British pound was little changed at $1.3279
-
The Japanese yen fell 0.8% to 144.69 per dollar
Cryptocurrencies
-
Bitcoin rose 1% to $61,420.9
-
Ether rose 0.4% to $2,461.73
Bonds
-
The yield on ten-year government bonds rose by three basis points to 3.76%
-
The German ten-year yield rose by six basis points to 2.09%
-
The British ten-year yield rose by eight basis points to 4.02%
Raw materials
-
West Texas Intermediate crude rose 3.3% to $72.13 a barrel
-
Spot gold fell 0.5% to $2,651 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Rob Verdonck and Winnie Hsu.
Most read from Bloomberg Businessweek
©2024 BloombergLP