Global equities and U.S. equity futures rose, recovering ground after the S&P 500 nearly fell into a bear market and China’s central bank cut a key interest rate.
Futures linked to the S&P 500 climbed 1.1%, suggesting the broad index could rebound after closing down 0.6% and hitting the lowest level since March 2021 on Thursday. on the Nasdaq-100 rose 1.4%, indicating gains in tech stocks after the opening bell. Dow Jones Industrial Average futures rose 0.9%.
Stocks have been under pressure this week on global growth concerns. Investors worried about how aggressively the Federal Reserve would react to high inflation and Covid-19 lockdowns in China that were limiting economic activity and hampering supply chains, prompting a sell-off.
The S&P 500 is set to close for the seventh straight week and has fallen about 3% so far. It nearly entered bearish territory in choppy trading on Thursday, a market shortcut for a 20% drop from its last high.
On Friday, China’s central bank unexpectedly lowered a key interest rate that serves as a benchmark for mortgages, a move that should support the country’s property market. He kept the other rates unchanged.
“We have a fear of growth right now, coming from China and biting monetary policy in the US. So this morning sentiment was helped by China action,” said Arun Sai, multi-asset strategist at Pictet Asset Management. “But we still need to gather more evidence to convince the markets that a soft landing is possible.”
Government bonds have largely rallied this week as they generally perform well in times of economic stress. The yield on the benchmark 10-year Treasury note rose slightly on Friday to 2.859% from 2.854% on Thursday.
Shares of Ross Stores plunged 24% in premarket trading after the retailer posted lower sales and said it expects another decline this quarter. Foot Locker rose 4% after its chief financial officer said he expects the company’s full-year earnings to be at the upper end of forecasts.
Palo Alto Networks jumped 12% after reporting quarterly revenue that beat analysts’ expectations. Cybersecurity firm CrowdStrike also rose 5.3%.
Farm equipment maker Deere tumbled 5.8% premarket, even as it posted higher sales and profits on strong demand.
“The earnings season has been good, there are a few more companies than usual that are beating expectations. The question is from next quarter, where we will have the full impact of the oil price surge and of the war in Ukraine,” said Kiran Ganesh, multi-asset strategist at UBS..
“That will be the key, it’s a bit of a preview.”
Overseas, the Stoxx Europe 600 gained 1.6%. Asian stocks also rose, with the Shanghai Composite climbing 1.6% and Hong Kong’s Hang Seng 3%.
The Swiss luxury goods company Cie. Financière Richemont fell 9% after it missed analysts’ operating profit estimates, citing the suspension of business in Russia.
Oil prices rose slightly, with Brent rising 0.3% to trade at $112.42 a barrel.
Write to Anna Hirtenstein at [email protected]
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