US futures retreat; dollar, treasuries gain: markets wrap

US futures slipped and Asian stocks were mixed Tuesday as investors weighed a potential setback on progress toward a coronavirus vaccine against an overnight surge in technology shares. The dollar and Treasuries advanced.

S&P 500 contracts fell as much as 0.6% after a report that Johnson & Johnson’s Covid-19 vaccine study has been paused due to an unexplained illness in a participant. Stocks remained higher in Australia, with a more modest advance in Japan. They were little changed in South Korea and China, where economic data pointed to further recovery for global trade and a robust domestic rebound.

The Australian dollar slid amid reports that China has suspended purchases of Australian coal. Hong Kong scrapped its trading session as a tropical storm neared. Earlier, the S&P 500 closed higher for a fourth day and technology leaders including Amazon.com Inc., Apple Inc. and Twitter Inc. helped the Nasdaq 100 to its biggest advance since April.

Investors are seeing prospects for a quick end to the stimulus stalemate in the US fading with members of the House being told not to expect any action this week and many Senate Republicans rejecting the White House proposal for a deal. Meantime, the Johnson & Johnson study halt was yet another sign that the race for a Covid-19 vaccine is bumpy as an economic recovery slows.

“The hurdles at the moment come from the uncertainty around the US election and the uncertainty about the timing and effectiveness of a vaccine,” Chris Iggo, Chief Investment Officer, AXA IM Core Investments.

In the US, the earnings season is getting underway, while Amazon is gearing for its Prime Day bonanza, and Apple for its event where it’s expected to unveil 5G as one of its most significant additions to this year’s iPhones.

US President Donald Trump tested negative on consecutive days for Covid-19, his doctor said on Monday afternoon, a week after being released from the hospital for treatment of the disease.

Meanwhile, the hearings for the Supreme Court nomination of Judge Amy Coney Barrett began Monday in the Senate Judiciary Committee as Republicans try to cement a conservative majority on the court before the November 3 election.

Elsewhere, oil rose after slumping with workers in the US Gulf heading back following Hurricane Delta’s landfall and Libya taking a major step toward reopening its biggest field.

Here are some key events coming up

• JPMorgan, Citigroup and BlackRock report earnings on Tuesday; results from Wells Fargo, Bank of America and Goldman Sachs are due Wednesday; Morgan Stanley’s earnings are scheduled for Thursday.
• UK Prime Minister Boris Johnson set a deadline of Thursday to thrash out the outline of a European Union trade deal.
• European Central Bank President Christine Lagarde leads off the virtual annual meetings of the International Monetary Fund and the World Bank Group. Through October 18.

These are some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.2% as of 7 a.m. in London. The S&P 500 climbed 1.6%.
• Topix index rose 0.4%.
• Australia’s S&P/ASX 200 Index added 1%.
• South Korea’s Kospi index fell 0.1%.
• Shanghai Composite Index was flat.
• Euro Stoxx 50 futures were little changed.

Currencies

• The yen traded at 105.42 per dollar, down 0.1%.
• The offshore yuan dipped 0.1% to 6.7489 per dollar following a 0.8% slide.
• The euro was at $1.1792, down 0.2%.
• The Aussie fell 0.3% to 71.85 US cents.
• The Bloomberg Dollar Spot Index rose 0.1%.

Bonds

• Ten-year Treasury yields fell about one basis point to 0.76%.
• Australia’s 10-year bond yield was at 0.85%.

Commodities

• West Texas Intermediate crude rose to $39.76 a barrel. It fell 2.7% in New York earlier.
• Gold dipped 0.5% to $1,913.71 an ounce.