by Andre Janse van Vuuren
US stock futures pulled back on Tuesday as investors question whether the rally has outpaced fundamentals, with risks from trade tensions and sticky inflation still in play.
S&P 500 contracts retreated 0.2% after the US benchmark closed Monday on the brink of a bull market, following six consecutive days of gains. By contrast, equity gauges in Europe and Asia advanced. The dollar’s weakness continued, dropping 0.1%. Gold fell.
Stocks have rallied in recent weeks amid optimism that tariff disputes are waning since President Donald Trump announced century-high levies April 2. Still, two Federal Reserve officials warned on Monday that they would adopt a wait-and-see approach to gain a clearer view of the economic outlook before lowering interest rates.
Treasuries steadied after whipsawing on Monday with the downgrading of US debt by Moody’s Ratings. Japanese notes slumped after a government bond auction received the lowest demand since 2012, pointing to increasing concerns about investor support as the Bank of Japan dials back its huge debt holdings.
Some Wall Street strategists are betting European stocks will enjoy their best performance relative to the US in at least two decades as the region’s economic outlook improves.
The Stoxx Europe 600 Index is expected to end the year around 554 points, according to the average of 20 strategists polled by Bloomberg. That implies a gain of about 1% from Friday’s close.
“If we have already moved past peak earnings uncertainty, this could set the stage for additional upside and potential multiple re-rating, especially among more beaten-up cyclical sectors,” Citigroup strategist Beata Manthey said of European stocks.
Some of the main moves in markets:
Stocks
Currencies
Cryptocurrencies
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
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