(Bloomberg) — US stock futures ticked lower after the S&P 500 finished with its 41st record close this year. Treasuries and the dollar steadied.
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Contracts on the S&P 500 pointed to a drop of 0.3% for the underlying index, while Europe’s Stoxx 600 gauge edged lower. SAP SE tumbled on news the German software developer and other companies are being probed by US officials for potentially conspiring to overcharge government agencies over the course of a decade.
Traders are looking for fresh catalysts after last week’s half-point Federal Reserve interest-rate cut spurred risk appetite. The latest policy moves from China on Wednesday aren’t rippling beyond Asian markets as investors question whether the steps will be sufficient to support the country’s flagging economy.
Central banks are in focus in Europe, with Sweden’s Riksbank cutting borrowing costs and hinting at further reductions in coming months. A policy decision is also due in the Czech Republic. Traders began pricing in an October cut by the European Central Bank on Tuesday and might be emboldened by comments from Governing Council member Klaas Knot that he expects gradual easing “in the near future.”
Gains for Nvidia Corp lifted US equities to their latest record on Tuesday, but the biggest drop since August 2021 in the Conference Board’s gauge of consumer sentiment had weighed on markets earlier. The report also flagged concerns about a slowdown in the labor market while manufacturing data also came in weaker than expected.
“The decay in the perceptions of jobs available was striking,” said Carl Weinberg, chief economist at High Frequency Economics. “It also will deliver a warning message about the state of the economy to financial markets.”
Swaps traders increased their wagers to more than three-quarters of a point of policy easing by year-end from the Fed, suggesting at least one more major US cut is in store, after the data. Investors are awaiting comments from Fed Chair Jerome Powell on Thursday as well as data on the Fed’s preferred price metric on Friday for further clues on the depth of future reductions.
China Rally
China’s central bank on Wednesday lowered the interest rate charged on its one-year policy loans by the most on record, the latest measure after its wide-ranging stimulus package announced the day before.
A Bloomberg gauge of commodities rose for an 11th day, set for its longest winning streak since January 2018. Iron ore rallied and gold hit another record.
The policy boosts came after Chinese stocks hit a five-year low as the government’s piecemeal approach to stimulus had failed to fix a crisis of confidence, with deflationary pressure, anemic consumption and an extended property slump combining to erode hopes of a near-term economic recovery.
Key events this week:
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ECB President Christine Lagarde speaks, Thursday
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US jobless claims, durable goods, revised GDP, Thursday
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Fed Chair Jerome Powell gives pre-recorded remarks to the 10th annual US Treasury Market Conference, Thursday
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China industrial profits, Friday
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Eurozone consumer confidence, Friday
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US PCE, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 fell 0.2% as of 8:51 a.m. London time
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S&P 500 futures fell 0.2%
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Nasdaq 100 futures fell 0.3%
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Futures on the Dow Jones Industrial Average fell 0.2%
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The MSCI Asia Pacific Index was little changed
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The MSCI Emerging Markets Index rose 0.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1189
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The Japanese yen fell 0.4% to 143.86 per dollar
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The offshore yuan fell 0.2% to 7.0224 per dollar
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The British pound fell 0.2% to $1.3386
Cryptocurrencies
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Bitcoin fell 0.7% to $63,800.46
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Ether fell 1.1% to $2,622.75
Bonds
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The yield on 10-year Treasuries was little changed at 3.74%
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Germany’s 10-year yield was little changed at 2.15%
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Britain’s 10-year yield was little changed at 3.93%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Zhu Lin and Winnie Hsu.
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