Stocks rally with US futures; commodities drop: markets wrap

Stocks rebounded Friday and US equity futures rose after Wall Street halted a three-day slide on signs of a strengthening economic recovery. Sliding commodity prices helped soothe some concerns about inflation risks.

MSCI Inc.’s Asia-Pacific share gauge advanced more than 1%, led by Japan, bringing some relief after a bruising week in which worries about price pressures sapped equities. Singapore’s index fell as the island-state enacted new restrictions to curb a flareup in virus cases.

European futures climbed along with S&P 500 and Nasdaq 100 contracts after rallies in indexes overnight. Industrial and financial shares outperformed, while energy producers joined a slump in oil.

Tesla Inc. fell after Chief Executive Officer Elon Musk said the electric-car maker is suspending purchases using Bitcoin over environmental concerns. Bitcoin fluctuated around $50,000, nursing losses from Musk’s move.

Markets appear to have recovered from a bout of volatility following an unexpectedly sharp increase in the US consumer price index. A drop in jobless claims helped sentiment, returning investor attention to a robust economic recovery. Global equities are still on track for their biggest weekly loss in 11 weeks, with a jump in producer prices reinforcing inflationary pressures.

Federal Reserve Governor Christopher Waller reiterated the central bank’s view that the economic reopening from the pandemic is driving only a temporary surge in prices, though it may last through 2022.

“We see 10-year yields move up, we see inflation expectations move up, but as long as the underlying economic backdrop is still doing just fine it should power that value trade generally,” Lori Calvasina, RBC Capital Markets head of US equity strategy, said on Bloomberg TV. “We’re going to have some interesting days but the runway is there from an economic perspective for this rotation to keep going.”

Treasuries recovered from the prior session’s weakness, with the 10-year yield easing to about 1.66% despite a lackluster auction of 30-year bonds. The Federal Reserve tweaked its purchasing plan to focus more on longer-dated Treasuries, while leaving the $80 billion monthly total unchanged.

The rally in commodities stalled. Oil headed for the biggest weekly drop since early April as some Asian nations fight persistent Covid-19 outbreaks, highlighting the patchy recovery from the pandemic.

These are some of the main moves in markets:

Stocks

• S&P 500 contracts climbed 0.5% as of 6:50 a.m. in London. The S&P 500 rose 1.2%
• Nasdaq 100 futures were up 0.6%. The index advanced 0.8%
• Japan’s Topix Index rose 1.9%
• Australia’s S&P/ASX 200 was up 0.6%
• South Korea’s Kospi gained 1.1%
• China’s Shanghai Composite Index added 1.4%
• Hong Kong’s Hang Seng climbed 0.8%
• Euro Stoxx 50 futures rose 0.7%

Currencies

• The Bloomberg Dollar Spot Index was steady
• The euro was at $1.2094
• The British pound was at $1.4056
• The Japanese yen was at 109.51 per dollar

Bonds

• The yield on 10-year Treasuries was steady at 1.65%
• Australia’s 10-year yield slipped two basis points to 1.79%

Commodities

• West Texas Intermediate crude slid 0.4% to $63.58 a barrel
• Gold futures dipped 0.1% to $1 825.61 an ounce