U.S. Futures Decline, Oil Drops Amid Suez Block: Markets Wrap

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(Bloomberg) — U.S. equity futures declined, erasing earlier gains, as Federal Reserve Chair Jerome Powell said the central bank’s upbeat economic forecast already reflected both fiscal stimulus and progress with vaccinations. Oil turned lower after a rally spurred by the blockage of the Suez Canal.

Contracts on the S&P 500 Index and Dow Jones Industrial Average held onto their decline even as data showed weekly jobless claims falling more than forecast. The Nasdaq 100 signaled more pain for tech stocks caught on the losing end of a rotation into cyclical shares that would benefit from an end to pandemic lockdowns.

In the premarket, Nike Inc. lost 4% as the company risked a boycott in China over its practice of not sourcing cotton from the contentious Xinjiang region.

West Texas Intermediate crude fell below $60 a barrel, after adding almost 6% Wednesday. Tugs and diggers are trying to dislodge the ship stuck for a third day in the Suez Canal, a critical waterway for trade.

Attention is also turning to Thursday’s seven-year Treasury auction to gauge the direction of bond yields, as poor demand for this maturity at last month’s sale helped trigger a global selloff in government debt and interest-rate sensitive stocks. U.S. benchmark 10-year yields were steady around 1.6%.

In Europe, stocks slumped, with concern over lockdown extensions and vaccine hiccups keeping cyclical shares on the back foot, with energy firms and banks among the biggest losers.

Elsewhere, Bitcoin fell as much as 4.7%, to the lowest in about two weeks.

These are some key events to watch this week:

The U.S. Treasury auctions seven-year debt.U.S. personal income and spending data on Friday.

These are some of the main moves in financial markets:

Stocks

Futures on the S&P 500 Index dipped 0.3% as of 8:32 a.m. New York time.The Stoxx Europe 600 Index fell 0.8%.The MSCI Asia Pacific Index climbed 0.1%.The MSCI Emerging Market Index declined 0.5%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro was little changed at $1.1809.The British pound gained 0.2% to $1.3707.The onshore yuan weakened 0.3% to 6.542 per dollar.The Japanese yen weakened 0.3% to 109.09 per dollar.

Bonds

The yield on 10-year Treasuries decreased less than one basis point to 1.61%.The yield on two-year Treasuries dipped less than one basis point to 0.14%.Germany’s 10-year yield fell two basis points to -0.37%.Britain’s 10-year yield sank three basis points to 0.728%.Japan’s 10-year yield gained one basis point to 0.086%.

Commodities

West Texas Intermediate crude fell 2.4% to $59.73 a barrel.Brent crude dipped 2% to $63.11 a barrel.Gold weakened 0.3% to $1,729.54 an ounce.

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