U.S. futures and European stocks clocked mild gains on Friday as investors awaited Federal Reserve Chair Jerome Powell’s speech from Jackson Hole.
(Bloomberg) — U.S. futures and European stocks clocked mild gains on Friday as investors awaited Federal Reserve Chair Jerome Powell’s speech from Jackson Hole.
Contracts on the S&P 500 gained 0.3%, signaling respite for underlying equities after Thursday’s decline. Europe’s Stoxx 600 extended its first weekly advance in four. Commodity shares led gains as oil and iron ore prices climbed.
Equities have struggled for direction this week, gaining strongly one day only to wipe out the advance the next, as the focus swung from Nvidia Corp. earnings to the trajectory of interest rates. Futures on the Nasdaq 100 were steady on Friday after the tech-heavy gauge sank more than 2% yesterday.
Treasury yields ticked higher, with those on two-year notes, which are more sensitive to imminent policy moves, holding above 5%.
Read more: Fed Officials See Rates Close to Peak, Differ on How Close
“There could be another phase of uncertainty and a broad-based selloff is possible depending on the magnitude of the hawkishness” at Jackson Hole, said Carlos von Hardenberg, portfolio manager at Mobius Capital Partners. “But the market is differentiating relatively radically between companies that are in the pole position to show very strong earnings growth in the near and medium term.”
Powell, who is scheduled to deliver a speech at 10:05 a.m. Washington time, will likely outline how officials will assess whether rates should go higher and determine when it’s time to start cutting them.
The effects of higher-for-longer interest rates will overshadow the buzz around artificial intelligence, spelling trouble for tech stocks, according to Bank of America Corp. strategists. On Thursday, even a blowout sales forecast from Nvidia wasn’t enough to stem the Nasdaq 100’s slump amid a rise in bond yields.
Elsewhere, China eased its mortgage policies further in a push to support its economy, although the boost to stocks on the mainland from the news proved short lived.
In commodities, iron ore was set for its biggest weekly gain since June ahead of China’s traditional peak season for construction activity from next month. Oil trimmed a weekly loss.
Key events this week:
- US University of Michigan consumer sentiment, Friday
- Fed Chair Jerome Powell, ECB President Christine Lagarde to address Jackson Hole conference, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.3% as of 7:05 a.m. New York time
- Nasdaq 100 futures rose 0.1%
- Futures on the Dow Jones Industrial Average rose 0.3%
- The Stoxx Europe 600 rose 0.5%
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0808
- The British pound rose 0.1% to $1.2616
- The Japanese yen was little changed at 145.95 per dollar
Cryptocurrencies
- Bitcoin rose 0.3% to $26,102.31
- Ether rose 0.3% to $1,653.39
Bonds
- The yield on 10-year Treasuries advanced one basis point to 4.25%
- Germany’s 10-year yield advanced five basis points to 2.56%
- Britain’s 10-year yield advanced three basis points to 4.46%
Commodities
- West Texas Intermediate crude rose 1.2% to $79.96 a barrel
- Gold futures fell 0.1% to $1,944.60 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson.
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