US stock futures rallied Wednesday and Asian stocks were stable after markets plummeted overnight due to tech sell-offs and Treasury Secretary Janet Yellen’s comments on interest rates. The dollar fell.
S&P 500 contracts rallied after gains in the commodities, financial and industrial sectors helped the benchmark to cut losses. Nasdaq 100 futures also rallied after a weaker index close, which was largely driven by declines in indicators such as Apple Inc., Tesla Inc. and Amazon.com Inc. Australian stocks rallied and Hong Kong stocks fluctuated. Markets in Japan, China and South Korea are closed for public holidays.
Yellen said rates are likely to rise as government spending rises and the economy responds with faster growth – comments economists take for granted. In a subsequent interview, the former chairman of the Federal Reserve System stated that she did not forecasting or recommending rate hikes.
Commodities rose to their highest level in nearly a decade as a result of a recovery in pandemic fuel demand. Copper rose again above $ 10,000 a tonne while oil traded above $ 66 a barrel. The New Zealand dollar outperformed all of its Group 10 peers on a strong employment record. Treasury bond futures were stable, cash markets in Asia closed.
The debate over whether government spending can spur excessive inflation continues as stock prices hover around their highest levels in two decades. Investors were reluctant to continue the rally despite some sharp corporate gains. While the Fed has assured markets that interest rates will remain at current lows throughout the recovery period, the strengthening data has raised concerns that policymakers may take measures to tighten rates earlier than expected.
To read: Worst Day for Nasdaq 100 Since March Fueled by Inflation Concerns
“The market will continue to focus on recovering growth and how Covid develops over time,” Cecilia Chan, chief investment officer of HSBC Asset Management Asia Pacific, told Bloomberg Television. She downplayed concerns about inflation and added that “the central bank will remain soft.”
Meanwhile, India continues to face the devastating wave of Covid-19. This prompted the central bank approving Rs 500 billion ($ 6.8 billion) in liquidity for banks to support lending to vaccine manufacturers, hospitals and healthcare providers, Governor Shaktikanta Das said in an unscheduled speech Wednesday.
For more information on the markets, see the MLIV blog
Here are some key events to watch this week:
- US ADP Employment Change Set To Happen On Wednesday
- Chicago Fed President Charles Evans gives a virtual speech at an event hosted by Bard College on Wednesday. Cleveland Fed President Loretta Mester gives a virtual speech to the Boston Economic Club
- Bank of England rate decision on Thursday
- The April US employment report will be released on Friday.
Some of the major moves in the markets are:
- S&P 500 futures were up 0.3% as of 12:53 pm in Hong Kong. S&P 500 lost 0.7%
- Nasdaq 100 contracts up 0.3% after falling 1.9%
- Australian S & P / ASX 200 up 0.6%
- The Hong Kong Hang Seng Index remains largely unchanged
- Euro Stoxx 50 Futures Gain 0.9%
- The Japanese yen is trading at 109.31 per dollar.
- The offshore yuan was worth $ 6.4802 per dollar.
- Bloomberg Spot Dollar Index Down 0.1%
- The euro was trading at $ 1.2023.
- The yield on the 10-year Treasury bond was 1.59% on Tuesday. Cash Treasury bonds not trading in Asia due to Japan weekend
- The yield on Australia’s 10-year bonds fell three basis points to 1.73%.
- West Texas Intermediate crude rose 0.8% to $ 66.24 a barrel
- Gold rose 0.1% to $ 1,780.88 an ounce.
– With the assistance of Rita Nazareth