Stock futures rose as volatile trading continues

US stock futures rose, putting major indexes on course to extend moves that caused fresh volatility in the markets this week.

S&P 500 futures rose 0.1% on Friday. The technology-focused Nasdaq 100 futures rose 0.3% and the Dow Jones Industrial Average futures rose 0.3%. The three major indexes fell on Thursday, closing at their lowest levels since 2020. Thursday’s decline reversed the stock’s rally on Wednesday.

Stock indices are on their way to end the week with sharp losses as investors try to assess inflation, central banks’ response to it and the outlook for the global economy. The Federal Reserve earlier this week approved the largest interest rate increase since 1994 and indicated that it will continue to raise interest rates this year at the fastest pace in decades to fight inflation.

The recent interest rate increases reversed a previous cycle of monetary policy easing that had allowed the prices of both stocks and bonds to rise in recent years. The prospect of repeat rate hikes over the remainder of the year has caused investors to sell and lend both assets to concerns that a rapid tightening could dampen growth. Mortgage rates in the US recently reached their highest level in more than 13 years. Recent economic data reports have shown sharp declines in key sectors.

“Central banks, which have been our friends for far too long, are telling us we should expect pain,” said Hani Reda, portfolio manager at PineBridge Investments. “That inflation number is the only thing that matters right now. Even if we see growth slow down a lot, it won’t be enough to trigger a change in the Fed’s trajectory.”

the master. Reda said it is likely that inflation will continue to rise in the coming months as energy prices will continue to rise. Brent crude, the international benchmark for oil prices, fell 0.3% to $119.46 a barrel.

European natural gas prices rose 2.4% on Friday, taking them up nearly 55% this week. Moscow’s move to cut natural gas exports to Europe this week has pushed the continent’s energy crisis into a dangerous new phase that threatens to deplete vital fuel supplies and derail the continent’s economy.

Where is the inflation of US household budgets most affected? John Hilsenrath of the Wall Street Journal traces the roots of rising prices to see why some sectors are rising more than others. Photo caption: Laura Kammermann / WSJ

There are still indications that investors have sought out assets that are seen as safe to hold, such as the US dollar and US government bonds. The WSJ Dollar Index, which measures the US currency against a basket of 16 currencies, rose 0.7%. In the bond markets, the yield on the benchmark 10-year Treasury note fell to 3.207% from 3.303% on Thursday. Yields decrease as prices rise.

The dollar value of Bitcoin and other cryptocurrencies showed marginal signs of stabilizing after the sharp decline over the previous 10 days. Bitcoin is almost unchanged from the 5 pm ET level on Thursday to trading at $20.637 on Friday. Cryptocurrencies have been hit by rising interest rates that dampen the appetite for riskier assets, and concerns about projects and companies selected in the crypto ecosystem.

In pre-market trading, Adobe shares fell 5.4% after the software provider for creativity, marketing and documents provided less-than-expected guidance.

Offshore, the Stoxx Europe 600 continental index was up 0.9%. Shares of mining and commodities giant Glencore added 1.9% in London trading after the company raised price and cost guidance for its coal operations and said its business beat expectations.

Stocks on Wall Street closed sharply lower on Thursday, with the Dow Jones Industrial Average dropping below 30,000.


Pictures:

Brendan McDermid/Reuters

In Asia, the Bank of Japan kept interest rates very low on Friday, stressing that it will not join the Federal Reserve and other major global central banks in tightening monetary policy. Japan’s Nikkei 225 index fell 1.8% and the Japanese yen fell 1.8% against the dollar.

South Korea’s Kospi fell 0.4%, while China’s Shanghai Composite added 1%.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

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