US Futures Decline Amid Antitrust Woes and Economic Concerns

by Yuki

US futures experienced a decline following that the US Justice Department is contemplating a breakup of Alphabet Inc.’s Google search engine. This potential action reflects a broader antitrust crackdown on Big Tech. S&P 500 contracts decreased by 0.3%, while Nasdaq 100 futures dropped by 0.5%. This downturn comes after a recent rebound on Wall Street, spurred by gains in Nvidia Corp. shares. Additionally, the yield on 10-year Treasury bonds remained above the significant 4% threshold after recent days of selling triggered by reduced expectations for interest-rate cuts. Meanwhile, Europe’s Stoxx 600 index remained relatively unchanged.

Traders are closely monitoring inflation data set to be released on Thursday, as it may indicate whether the Federal Reserve will persist with interest rate cuts. Recent speeches from central bank officials suggest a cautious approach, with Federal Reserve Bank of Boston President Susan Collins emphasizing that any rate cuts should be carefully considered and data-driven.

In Asia, China’s CSI 300 Index initially fell by 7.4% but later recovered some of its losses after officials announced a briefing regarding fiscal policy scheduled for Saturday. Concerns are growing that the latest stimulus measures from China may not be sufficient to instill confidence in a sustained equity market rally. Reports indicate that Chinese tourists spent less during their recent long holiday, highlighting the need for new policies to stabilize economic growth and investor expectations. The National Development and Reform Commission of China announced that only 200 billion yuan (approximately $28 billion) would be advanced from next year’s budget, despite analysts predicting a fiscal package worth up to 3 trillion yuan.

“To sustain market enthusiasm, more aggressive actions regarding the new fiscal package or mechanisms for market stabilization may be necessary,” remarked Homin Lee, senior macro strategist at Lombard Odier. He added that market fluctuations could persist until the National People’s Congress Standing Committee meeting and the upcoming US elections in early November.

Key Events This Week:

Wednesday: Federal Reserve minutes released; speeches from Fed officials Lorie Logan, Raphael Bostic, Austan Goolsbee, and Mary Daly.

Thursday: US CPI and initial jobless claims announced; speeches from Fed officials John Williams and Thomas Barkin.

Friday: JPMorgan and Wells Fargo kick off earnings season for major Wall Street banks; US PPI and University of Michigan consumer sentiment index released; speeches from Fed officials Lorie Logan, Austan Goolsbee, and Michelle Bowman.

Market Movements:

Stocks:

  • Stoxx Europe 600 was little changed as of 8:12 a.m. London time.
  • S&P 500 futures fell by 0.3%.
  • Nasdaq 100 futures fell by 0.5%.
  • Dow Jones Industrial Average futures dropped by 0.2%.
  • MSCI Asia Pacific Index declined by 0.2%.
  • MSCI Emerging Markets Index decreased by 0.5%.

Currencies:

  • Bloomberg Dollar Spot Index rose by 0.1%.
  • Euro fell by 0.2% to $1.0953.
  • Japanese yen remained stable at 148.30 per dollar.
  • Offshore yuan was stable at 7.0694 per dollar.
  • British pound fell by 0.3% to $1.3060.

Cryptocurrencies:

  • Bitcoin decreased by 0.2% to $62,222.91.
  • Ether fell by 0.3% to $2,434.28.

Bonds:

  • Yield on 10-year Treasuries remained steady at 4.01%.
  • Germany’s 10-year yield declined by two basis points to 2.23%.
  • Britain’s 10-year yield was stable at 4.18%.

Commodities:

  • Brent crude rose by 0.6% to $77.62 per barrel.
  • Spot gold fell by 0.4% to $2,610.79 per ounce.

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