Nasdaq Futures Gain With Bonds on Reflation Unwind: Markets Wrap – Yahoo Finance

(Bloomberg) — Treasuries extended a rally while U.S. equity futures slipped amid a rotation out of cyclical stocks that have characterized this year’s dominant reflation trades. Commodities slumped.

Contracts on the S&P 500 Index fell 0.4% with those on the tech-heavy Nasdaq 100 erasing early gains. Benchmark Treasury yields slid below 1.5% as traders pulled back longer-term inflation expectations.

Popular trades linked to hotter inflation are in retreat after the Federal Reserve signaled it was preparing for earlier interest-rate increases, helping to rein in speculation that price pressures could get out of hand.

“Investors believe the Fed will keep inflation in check, while U.S. activity is peaking,” Barclays Plc strategists led by Emmanuel Cau wrote in a note to clients. “This is driving rotation away from reflation plays and back to growth stocks.”

Markets that are clearly benefiting from the reopening are seeing a pullback, with copper on course for its worst week since the start of the pandemic.

Oil fell for a second day, with Brent crude slipping from this week’s 2018 high. An advance in the dollar this week has made commodities that are priced in the U.S. currency more expensive, driving declines across the complex. The Bloomberg Dollar Spot Index was little changed Friday.

Some volatility may be possible later when options and futures on indexes and equities expire, an event known as “triple witching.”

Read: Stock-Market Doldrums Face Shake-Up With Friday’s ‘Witching’

For more market commentary, follow the MLIV blog.

Stocks

Futures on the S&P 500 Index declined 0.3% as of 7:38 a.m. New York time.The Stoxx Europe 600 Index sank 0.8%.The MSCI Asia Pacific Index dipped 0.2%.The MSCI Emerging Market Index climbed 0.1%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro was little changed at $1.1908.The British pound sank 0.3% to $1.3882.The onshore yuan strengthened 0.1% to 6.439 per dollar.The Japanese yen strengthened 0.1% to 110.15 per dollar.

Bonds

The yield on 10-year Treasuries sank two basis points to 1.49%.The yield on two-year Treasuries increased less than one basis point to 0.21%.Germany’s 10-year yield declined one basis point to -0.20%.Japan’s 10-year yield declined less than one basis point to 0.059%.Britain’s 10-year yield fell one basis point to 0.766%.

Commodities

West Texas Intermediate crude decreased 0.7% to $70.57 a barrel.Brent crude dipped 0.8% to $72.51 a barrel.Gold strengthened 1.1% to $1,792.53 an ounce.

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.