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Stock futures slide ahead of economic data


US stock futures fell slightly ahead of the economic data and after the Reserve Bank of Australia spooked investors with a bigger than expected interest rate hike.

S&P 500 futures fell 0.6%, reversing direction after the broad market index closed 0.3% higher on Monday. Nasdaq-100 futures fell 0.7%, indicating losses for tech stocks after the opening bell.

Stocks have wobbled in recent days, rocked by shifts in sentiment on the strength of the economy and the likely path of central banks and interest rates. A big concern is that central banks could act too aggressively in fighting inflation and trigger slower economic growth or even a recession. On Tuesday, the Reserve Bank of Australia raised its key rate by 0.5 percentage points, more than expected.

“We’re still in this constant pressure on inflation, growth and whether we’re going to be in a recession or not,” said Fahad Kamal, chief investment officer at Kleinwort. Hambros.

“Australia’s central bank decision reminds us that central banks can surprise on the upside. What does that tell us about what the Fed will do, what the ECB will do? Mr. Kamal said. “A more aggressive tightening directly equates to a higher likelihood of a recession.”

Investors were waiting for more data on the state of the economy. The U.S. trade deficit in April is scheduled for 8:30 a.m. ET and economists expect it to narrow after hitting a record deficit the previous month. A key release this week is Friday’s Consumer Price Index, which will be closely watched to detect whether inflation is weakening or not.

The yield on the benchmark 10-year Treasury rose to 3.060%, its highest level in almost a month, before falling back to 3.031% from 3.037% on Monday. Yields rise when prices fall.

“With yields at 3%, it shows that the market hasn’t decided if we’re going to have a recession or if we have one, how bad will it be,” said Julien Lafargue, chief market strategist at Barclays Private. Bank. . “It’s what you would want to own if you expect a recession.”

Traders worked on the floor of the New York Stock Exchange on Friday.


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Oil prices have soared. Global benchmark Brent crude added 0.6% to trade at $120.15 a barrel. A global crude oil glut is ending as demand from China recovers due to the easing of lockdown restrictions, Goldman Sachs analysts wrote in a note. They expect Brent to hit $135 a barrel in the second half.

Food maker JM Smucker and arcade company Dave & Buster’s Entertainment are expected to report earnings on Tuesday before the opening bell. Casey’s General Stores is expected to report after markets close.

In premarket trade, Kohl’s jumped more than 13% after the Wall Street Journal reported the department store chain was in exclusive talks to be sold to retail holding company Franchise Group. The deal could value the company at around $8 billion.

Twitter fell 0.8%, extending Monday’s decline after Elon Musk threatened to end its acquisition of the social media platform, saying the company was not complying with data requests spam accounts.

Overseas, the pancontinental Stoxx Europe 600 index lost 0.3%.

In Asia, major benchmarks were mixed. The Shanghai Composite Index gained 0.2%, while the Hong Kong Hang Seng Index fell 0.4%. Japan’s Nikkei 225 edged up 0.1%.

The Japanese yen weakened 0.6% to its lowest level against the dollar since April 2002. The yen has sold off this year as the Bank of Japan remains committed to an ultra-loose monetary policy, while many other central banks have started raising interest rates. to combat rapid inflation.

Cryptocurrencies fell, with bitcoin dropping 6% and falling below $30,000. Ether is down 5%.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

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