Stocks Retreat as Investors Look for New Drivers: Market Overview
Following the S&P 500’s strongest week of the year, US equity futures edged lower as investors awaited further developments that might influence the Federal Reserve’s decision-making. The S&P 500 futures dropped by 0.3%, while Nasdaq 100 futures decreased by approximately 0.5%. In Europe, the Stoxx Europe 600 index saw a decline after a nine-week winning streak, its longest in over a decade. Meanwhile, Treasury yields increased, and the Bloomberg dollar spot index fell for the first time in three sessions.
A crucial week lies ahead with a packed economic calendar, including the release of the Fed’s preferred measure of inflation on Friday, coinciding with many markets being closed for a holiday. Investors are treading cautiously, seeking clarity on the Fed’s next moves, especially after recent dovish remarks by Fed Chair Jerome Powell sparked speculation of a potential rate cut. However, concerns over stock valuation persist following the market’s rapid ascent.
In premarket trading in the US, tech giants Intel Corp (INTC) . and Advanced Micro Devices (AMD) saw declines following reports of China’s intentions to restrict the use of American chips in government computers. United Airlines (UAL) shares dropped amid potential regulatory actions due to safety concerns, whereas Boeing (BA) shares climbed as CEO Dave Calhoun announced his resignation. Goldman Sachs analysts maintain a positive outlook on European stocks, suggesting the Stoxx Europe 600 index could rise by about 6% in the coming year.
European defense stocks gained after a deadly terrorist attack in Moscow, with companies like Dassault Aviation (DAUO.DU) and Rheinmetall (RHM.DE) noting significant increases. In other news, Swedish property firm SBB repurchased bonds at a significant discount, while Direct Line Insurance Group’s (DIISY) stock plummeted after Ageas withdrew its takeover bid.
In Asia, markets were mostly subdued, with Japan’s Topix index dropping amid currency intervention warnings. The offshore yuan appreciated against a weakening dollar, supported by the People’s Bank of China’s market operations.
Chinese Premier Li Qiang sought to reassure investors about the economy’s prospects, highlighting increased policy support. Despite these efforts, Chinese and Hong Kong stocks experienced slight declines.
Commodity markets saw oil prices rise due to geopolitical tensions and optimistic industry forecasts. Gold remained stable, and iron ore sustained its recent gains. In the crypto space, Bitcoin’s increase spurred gains in related premarket stocks in the US.
