U.S. stock futures gained as investors assessed the impact that China’s loosening Covid-19 restrictions would have on global supply chains and looked ahead to fresh economic figures.
Futures for the S&P 500 rose 0.5% Tuesday, pointing to rises for stocks after a choppy trading session Monday that sent the broad benchmark index falling 0.3%. Contracts for the Dow Jones Industrial Average gained 0.5%, while those for the technology-focused Nasdaq-100 climbed 0.5%.
VIX rose 0.15% while VIXmain slid 0.95%.
Gold rose 0.1% and reached $1826.7.
Stocks have largely bounced back in recent sessions as traders reassessed expectations of steep Federal Reserve interest-rate increases. Weakening economic data have provided some investors with hope that U.S. central bankers might become less hawkish as it tries to fight inflation.
Still, doubts remain about how long-lasting any rally will be, and many note that indexes are still highly sensitive to news that could rapidly swing stocks either way. The latest example came Tuesday when China’s National Health Commission on Tuesday said it would loosen its strict quarantine requirements for international travelers. U.S. stock futures reversed earlier losses to trade higher after the news.
Money managers and strategists said recent gains in equities have also been driven by month-end and quarter-end portfolio rebalancing. Many say they still expect more pain ahead for indexes as central bankers grapple with inflation data that could continue to remain sticky next month. Even so, some have waded in to buy stocks at a discount after a months-long drawdown that has sent the S&P 500 falling 18% for the year.
Later Tuesday, investors will parse data on home prices, as well as consumer confidence data from the Conference Board. Economists surveyed by The Wall Street Journal expect consumers’ optimism to further cool for June as Americans continue to assess the impact of high inflation and rising interest rates.
In premarket trading in New York, travel and energy companies were bright spots in the market. Occidental PetroleumandDevon Energyeach climbed more than 2%. Wynn Resorts climbed 4.9% and cruise line Carnival rose 1.6%.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note advanced to 3.222%, from 3.193% Monday. Yields climb when bond prices fall. In general, Treasury yields have fallen in recent weeks as investors re-evaluated their expectations for the Fed’s interest-rate hikes.
Oil prices climbed. Brent crude, the international benchmark for oil prices, rose 1.3% to $112.44 a barrel.
Bitcoin dipped slightly from its 5 p.m. ET price Monday, losing 0.3% to trade around $20,842.
Overseas, the pan-continental Stoxx Europe 600 rose 0.6%, driven higher by a rally in stocks including mining and manufacturing companies.
In Asia, indexes broadly rallied after China said it would loosen its strict quarantine requirements. The CSI 300 index of Shanghai- and Shenzhen-listed stocks closed 1% higher, while Hong Kong’s Hang Seng Index added 0.7% by late afternoon. Shares in airlines, restaurant chains and Macau casino operators surged.
The biggest gainers included travel-booking companyTrip.com Group Ltd., whose Hong Kong-listed stock stood 17% higher by late afternoon, and the casino company Sands China Ltd., which advanced nearly 13%.
Comments