U.S. stock futures rose, pointing to major indexes extending gains that have come amid milder expectations for Federal Reserve interest-rate increases.
Futures for the S&P 500 rose 0.5% on Monday, while futures for the Dow Jones Industrial Average added 0.4%. Contracts for the technology-focused Nasdaq-100 gained 0.7%.
VIX rose over 3% while VIXmain slid nearly 1%.
Markets look set to build on a rally that drove the S&P 500 to its largest one-day percentage gain in two years on Friday. Weaker-than-expected U.S. economic data have caused investors to reassess their expectations for a blistering pace of monetary-policy tightening from the Federal Reserve.
The Fed’s plans to raise rates and tame inflation have sparked volatility in global markets this year and earlier this month sent the S&P 500 into a bear market, or a 20% drop from a recent peak.
But recent reports have indicated that the U.S. economy—and potentially inflation—is beginning to cool off. The latest evidence came Friday as the University of Michigan revised lower its June reading of inflation expectations over the next five to 10 years—to 3.1% from 3.3%.
Treasury yields have fallen in recent weeks as investors bet the Fed’s plans for raising rates will be cut short. The yield on the benchmark 10-year Treasury note traded at 3.162% Monday, up from 3.125% on Friday but well off its peak of 3.482% this month. Bond yields rise when prices fall.
Overseas, both the pan-European Stoxx 600 and the U.K.’s FTSE 100 rose 0.7%. In Asia, Japan’s Nikkei 225 rose 1.4% and Hong Kong’s Hang Seng rose 2.4%.
Shares ofProsus NV, an anchor shareholder in Tencent Holdings, surged 13% after the Dutch company said it would sell some of its stake in the Chinese internet giant to fund its share buybacks. Tencent’s Hong Kong-listed shares lost 1.6%.
The Hang Seng Tech Index, which tracks the 30 largest technology companies listed in Hong Kong, jumped 4.7%, with smartphone maker Xiaomi Corp. surging more than 12%.
Investors in Asia are growing more optimistic about Chinese economic growth and coming economic stimulus, said Aninda Mitra, head of Asia macro and investment strategy at BNY Mellon Investment Management. While most other major economies struggle to keep inflation under control, investors believe Chinese macroeconomic indicators are likely to start improving on a month-over-month basis, he said.
In mainland China, the CSI 300 Index tracking the 300 largest domestic-listed companies rose 1.1%.
Brent crude prices edged up 0.1% to $109.15 a barrel. Over the weekend, the Group of Seven countries said they are moving toward an agreement on expanding sanctions against Russia by looking for a mechanism to cap the purchase price of Russian oil.
The details of the oil purchase price cap are expected to be completed ahead of the summit’s conclusion on Tuesday but would create a buyers’ cartel of Western nations and their allies.
G-7 countries also announced a ban on Russian gold imports. Russia’s central bank has a stash of gold worth roughly $140 billion, representing the world’s fifth-largest stash, according to the World Gold Council. The import ban is expected to constrain global supply and push up prices, according to analysts. Gold prices rose 0.6% to $1,840.80 a troy ounce Monday.
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