U.S. Futures Gain With Europe Stocks After Selloff: Markets Wrap

(Bloomberg) -- U.S. equity futures climbed with European stocks as optimism crept into markets that Tuesday’s tumble drew a line under the recent selloff.

S&P 500 and Nasdaq 100 contracts advanced in the wake of large declines in America that were led by tech shares. On Wednesday, computer chip and hardware makers rose in the premarket including Advanced Micro Devices Inc. and Apple Inc. The rebound extended to Tesla Inc., which clawed back a fraction of the value it lost a day earlier. Shares climbed broadly in Europe while AstraZeneca Plc slipped on news it paused trials of a leading experimental Covid-19 vaccine when a participant got sick.

Treasuries retreated and the dollar was steady. The pound headed for its longest declining streak since March on worries that talks could collapse over changes to the Brexit withdrawal deal.

Global investors are grappling with the recent market turbulence, assessing whether the pullback for equities is a sign of market health or the start of a larger drawdown that has further to go. There was a powerful force of resistance across assets, with slides halting around their 50-day moving averages.

“A setback like that seen in Nasdaq stocks over the past days has been overdue,” Commerzbank AG strategists including Alexander Kraemer wrote in a note to clients, citing excessive valuations. “Nonetheless, the underlying drivers of the recent rally remain in place. We believe that the recent setback will emerge as a buying opportunity for year-end performance.”

Elsewhere, crude oil climbed just above $40 a barrel in London. Yields on New Zealand’s three-year bonds dropped into negative territory for the first time.

Here are some key events coming up:

The ECB is expected to hold rates steady on Thursday but indicate that downside risks have intensified, suggesting further easing is possible before year-end.The U.S. releases initial jobless claims numbers Thursday.U.S. CPI data is due Friday, with consumer prices expected to have risen in August.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index increased 1% as of 8:19 a.m. New York time.The Stoxx Europe 600 Index climbed 0.8%.Germany’s DAX Index rose 1.2%.The MSCI Asia Pacific Index declined 1.1%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro was little changed at $1.1774.The Japanese yen weakened 0.2% to 106.24 per dollar.The British pound fell 0.5% to $1.2919.

Bonds

The yield on 10-year Treasuries climbed one basis point to 0.69%.Germany’s 10-year yield gained two basis points to -0.48%.Britain’s 10-year yield gained two basis points to 0.207%.

Commodities

West Texas Intermediate crude climbed 1.8% to $37.41 a barrel.Gold weakened 0.2% to $1,927.67 an ounce.

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