US futures choppy amid caution over covid, Fed: markets wrap

Global stocks rose modestly, while US index futures fluctuated between gains and losses, as investors assessed the outlook for economic recovery and awaited the latest Federal Reserve minutes to gauge the direction of monetary policy.

Contracts on the S&P 500 Index slipped less than 0.1% after the underlying gauge fell on Tuesday by the most in four weeks. The dollar halted a two-day rally and Treasury yields were steady. Oil rebounded from a four-day slump a US industry report pointed to another drop in domestic crude stockpiles.

A sense of caution was visible in markets, with most assets posting small moves, amid the relentless spread of the delta virus variant, the prospect of reduced stimulus support and elevated inflation. While the Fed minutes Wednesday may give some clues about the timeline for tapering stimulus, the next catalyst for markets may not come before the central bank’s August 26-28 conference at Jackson Hole, Wyoming.

“The market remains cautious,” Mizuho International Plc strategists including Peter Chatwell wrote in a note. Unless Fed minutes “reveal something substantively different from recent source stories, the market is unlikely to react significantly, and choppy trading may continue.”

In a town hall meeting Tuesday, Fed Chair Jerome Powell flagged that the pandemic is “still casting a shadow on economic activity” but didn’t discuss the outlook for monetary policy or specifics on growth and the risks from the delta variant.

European stocks were little changed as Covid risks continued to hang heavy on the economic outlook. The British pound rose 0.1% against the US dollar after data showed UK inflation fell back to the Bank of England’s 2% goal in July.

West Texas Intermediate crude rose for the first time in five days. The American Petroleum Institute’s report that inventories fell last week outweighed concern over the impact of the pandemic on demand.

Bitcoin advanced after two days of losses and traded around $45 200 apiece.

Here are some events to watch this week:

• FOMC minutes released Wednesday
• Bank Indonesia rate decision and Governor Perry Warjiyo briefing Thursday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 was little changed as of 8:33 a.m. London time
• Futures on the S&P 500 were little changed
• Futures on the Nasdaq 100 were little changed
• Futures on the Dow Jones Industrial Average fell 0.2%
• The MSCI Asia Pacific Index rose 0.4%
• The MSCI Emerging Markets Index rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro rose 0.2% to $1.1728
• The Japanese yen was little changed at 109.55 per dollar
• The offshore yuan rose 0.1% to 6.4820 per dollar
• The British pound was little changed at $1.3749

Bonds

• The yield on 10-year Treasuries was little changed at 1.26%
• Germany’s 10-year yield declined one basis point to -0.48%
• Britain’s 10-year yield declined two basis points to 0.54%

Commodities

• Brent crude rose 0.8% to $69.56 a barrel
• Spot gold rose 0.4% to $1 793.44 an ounce