(Bloomberg) — U.S. futures slipped and European stocks struggled for traction on Tuesday as technology shares continued to weigh on equities. The dollar rallied.
Contracts on the Nasdaq 100 Index traded down 0.3% a day after tech giants Tesla Inc. and Amazon.com Inc. dragged the underlying gauge lower on signs of quickening inflation. Technology shares were the biggest laggards in the Stoxx Europe 600 Index as well, with semiconductor firm Infineon Technologies AG slumping nearly 5%.
Treasuries dropped alongside most European bonds, while a gauge of commodity prices hovered at the highest level since 2012. WTI crude oil climbed above $65 a barrel. Digital token Ether extended its surge to set another record as larger rival Bitcoin slipped.
As the global economic recovery gathers pace thanks to successful vaccine rollouts in much of the developed world, investors nevertheless remain attuned to risks. Inflation is a chief concern, with a gauge of prices paid for materials jumping to the highest since 2008 on Monday. The breadth of the rebound is also an open question, after Federal Reserve Chair Jerome Powell said that economic progress has been uneven across racial and income divides.
Meanwhile, fierce new Covid-19 waves are enveloping India and parts of Southeast Asia, placing severe strain on their health-care systems and prompting appeals for help.
“We do believe that inflationary pressures will continue this year and that’s driven by the kind of policy we have seen globally,” Rupal Agarwal, a quantitative strategist at Sanford C Bernstein, said on Bloomberg TV. “In the shorter term you can expect some pullback in the markets but the broader sentiment remains bullish” as the reopening and reflation trade remains in force, she said.
Elsewhere, shares rose in Hong Kong, Australia and South Korea.
Here are some key events to watch this week:
U.S. trade balance, factory orders, durable goods are due TuesdayChicago 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 ClubBank of England rate decision ThursdayThe April U.S. employment report is released on Friday
These are some of the main moves in markets:
Futures on the S&P 500 Index fell 0.1% as of 5:58 a.m. New York time.The Stoxx Europe 600 Index increased 0.1%.The MSCI Asia Pacific Index declined 0.1%.The MSCI Emerging Market Index was little changed.
The Bloomberg Dollar Spot Index advanced 0.4%.The euro sank 0.5% to $1.2008.The British pound dipped 0.2% to $1.3881.The onshore yuan was little changed at 6.475 per dollar.The Japanese yen weakened 0.3% to 109.42 per dollar.
The yield on 10-year Treasuries jumped two basis points to 1.62%.The yield on two-year Treasuries advanced one basis point to 0.16%.Germany’s 10-year yield dipped less than one basis point to -0.21%.Britain’s 10-year yield gained one basis point to 0.847%.Japan’s 10-year yield was unchanged at 0.097%.
West Texas Intermediate crude increased 1.7% to $65.56 a barrel.Brent crude gained 1.8% to $68.75 a barrel.Gold weakened 0.5% to $1,783.09 an ounce.
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