US futures lower in aimless trading; bonds rally: markets wrap

US equity futures and stocks struggled for direction as risk aversion lifted bonds and havens following ephocal six-month losses across major markets.

Contracts on the S&P 500 and Nasdaq 100 were slightly lower after the S&P 500 suffered its biggest first-half drop in over 50 years. The 10-year US Treasury yield slid below 3% to the lowest since early June. Every Group-of-10 currency fell against the dollar and the yen, traditional havens.

Risk assets continued to be the target of sellers Friday as recession worries overtake concern about runaway inflation. With Federal Reserve policymakers resolute on getting price growth back to their 2% target, investors are assessing the hit to the economy from harsh rate hikes.

“Inflation is the key focus of central bankers; investors losing money is way down their list of concerns,” Chris Iggo, chief investment officer at AXA IM Core, wrote in a note to clients. “Interest rate and inflation markets are taking the view that what is priced in terms of monetary tightening will be enough to bring inflation down, but in order for that to happen, there also needs to be a cost to growth.”

Some of the main moves in markets:

Stocks

• Futures on the S&P 500 fell 0.2% as of 6:31 a.m. New York time
• Futures on the Nasdaq 100 fell 0.3%
• Futures on the Dow Jones Industrial Average fell 0.2%
• The Stoxx Europe 600 was little changed
• The MSCI World index fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%
• The euro fell 0.2% to $1.0467
• The British pound fell 0.8% to $1.2076
• The Japanese yen rose 0.2% to 135.50 per dollar

Bonds

• The yield on 10-year Treasuries declined five basis points to 2.97%
• Germany’s 10-year yield advanced one basis point to 1.35%
• Britain’s 10-year yield declined one basis point to 2.22%

Commodities

• West Texas Intermediate crude rose 1.7% to $107.53 a barrel
• Gold futures fell 0.9% to $1 791.30 an ounce