(Bloomberg) — U.S. equity futures dropped with stocks on Wednesday as investors weighed earnings reports and awaited the conclusion of the first Federal Reserve policy meeting of the year.
S&P 500 contracts extended their losses throughout the European session, though Nasdaq futures outperformed following a strong fiscal second-quarter sales report from Microsoft Corp. Apple Inc., Facebook Inc. and Tesla Inc. are all due to report earnings later on Wednesday. Meanwhile, GameStop Corp. continued its meteoric rise in U.S. premarket trading after an Elon Musk tweet fanned the flames of its rally.
The Stoxx Europe 600 Index declined as the European Union and AstraZeneca Plc disagreed over whether a planned call to resolve vaccine delivery delays would take place. The euro fell after a European Central Bank official said it has the necessary tools to avoid any further strengthening of the currency.
While attention is focused on tech earnings and the Fed, new coronavirus variants that sparked fresh lockdowns are also weighing on the so-called reflation trade that bets on an end to curbs. The International Monetary Fund downgraded Europe’s 2021 growth outlook on Tuesday, in part on its late and stumbling vaccination campaign. Data showed global coronavirus cases surpassed 100 million, with the U.K. becoming the first nation in Europe with 100,000 deaths.
“For the reopening trade to really have persistence it is going to need to show a much broader participation across the market,” Jim McDonald, chief investment strategist at Northern Trust, said on Bloomberg TV. “The virus vaccine rollout is the most important development to help give confidence in the shape of the recovery.”
Elsewhere, Treasury yields held steady and the dollar strengthened. A gauge of Asian equities held at the lowest in about a week.
These are some key events coming up in the week ahead:
Apple Inc., Tesla Inc., Facebook Inc. and Samsung Electronics Co. are among companies reporting results.The Federal Open Market Committee monetary policy decision and briefing by Chair Jerome Powell are scheduled for Wednesday.Fourth-quarter GDP, initial jobless claims and new home sales are among U.S. data releases Thursday.U.S. personal income, spending and pending home sales come Friday.
These are the main moves in markets:
Stocks
Futures on the S&P 500 Index declined 0.7% as of 6:54 a.m. New York time.The Stoxx Europe 600 Index decreased 1%.The MSCI Asia Pacific Index decreased 0.3%.The MSCI Emerging Market Index dipped 0.7%.
Currencies
The Bloomberg Dollar Spot Index rose 0.3%.The euro declined 0.4% to $1.2117.The British pound dipped 0.2% to $1.3711.The onshore yuan weakened 0.1% to 6.472 per dollar.The Japanese yen weakened 0.2% to 103.84 per dollar.
Bonds
The yield on 10-year Treasuries decreased less than one basis point to 1.03%.The yield on two-year Treasuries dipped less than one basis point to 0.12%.Germany’s 10-year yield declined one basis point to -0.54%.Britain’s 10-year yield jumped one basis point to 0.275%.Japan’s 10-year yield gained one basis point to 0.049%.
Commodities
West Texas Intermediate crude climbed 0.1% to $52.66 a barrel.Brent crude increased 0.2% to $56.02 a barrel.Gold weakened 0.4% to $1,842.73 an ounce.
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