Futures contracts move in the water after liquidation; Oil rally constructions

Behind much of the recent declines: losses for some of America’s biggest tech companies. Major tech stocks are particularly sensitive to changes in bond yields, which affect the values ​​investors place on distant future earnings.

These falls took an early hiatus on Tuesday. Facebook shares rose 1.3% in pre-market trading, a day after its social media and messaging platforms crashed. Facebook whistleblower Frances Haugen is scheduled to testify before Congress on Tuesday.

Quarterly profits for beverage maker PepsiCo are expected to be released ahead of the opening bell.

In Asia, stock markets followed Monday’s losses on Wall Street. In Tokyo, the Nikkei 225 fell 2.2%, with SoftBank Group, the technology investment powerhouse which is a major component of the index, losing 3.8%.

Concerns over Chinese real estate companies, fueled in recent weeks by tensions at China Evergrande Group,

were rekindled by little rival Fantasia Group Holdings, which said Monday evening it had failed to repay some maturing dollar bonds. Fantasia’s stock was suspended, while the Lippo Select HK & Mainland Property index fell by more than 3%.

Elsewhere in the region, South Korea’s Kospi Composite fell 1.9%, while Australia’s S & P / ASX 200 fell 0.4%. Hong Kong’s Hang Seng Index retraced its initial losses to gain 0.4%. Mainland Chinese markets have been closed for a holiday.

The pan-continental Stoxx Europe 600 rose 0.2%, led by banks, utilities and media companies.

Investors have been faced with a range of concerns, including grunts in the supply chain, a seven-year peak in oil prices, and expectations that the Federal Reserve will start cutting stimulus measures to combat the inflation. The declines capped an almost uninterrupted rally for US indices that began in March of last year. Investors are settling for a tougher time ahead.

“The stock markets today are more worried about inflation, the possibility that we then see higher rates and how that undermines the very high levels they have traded at,” said Rob Carnell. , head of research. for Asia-Pacific at ING.

The yield of the benchmark 10-year US Treasury Index rose to 1.484% on Tuesday, from 1.481% on Monday. Yields move in the opposite direction to prices.

Meanwhile, soaring energy prices threaten to weigh more on businesses as earnings prospects darken. West Texas Intermediate, the benchmark of US oil, rose 0.5% to $ 78.06 per barrel, its highest level since 2014. Brent crude, the international benchmark, rose 0. 5% to $ 81.69 per barrel, its highest level since 2018.

Investors took a very bullish stance at the end of the third quarter, which likely exacerbated the pullback, said Sean Darby, global equities strategist at Jefferies.

“The positioning was way too aggressive, and we’re probably not going to be in a period of decent macro releases either,” Mr. Darby said. “So I’m not sure what the market is going to cling to as a beacon of optimism in the short term.”

Data on the U.S. trade deficit is expected to be released at 8:30 a.m. ET. Economists expect the trade gap to widen slightly in August after preliminary data showed exports hit record highs as the global economic recovery gathered pace and imports of consumer goods were also increasing.

A survey of purchasing managers in the service sector is also on the agenda at 10 a.m.ET. The Institute for Supply Management survey is expected to show activity grew at a slower pace last month than in August due to consumer concerns about the Delta variant of Covid-19.

Write to Quentin Webb at [email protected] and to Will Horner at [email protected]