Global stocks and Wall St futures rise as inflation fears subside :: WRAL.com

By JOE McDONALD, AP Business Writer

BEIJING – Global stocks and Wall Street futures rose on Tuesday as inflation fears eased and investors regained risk appetite.

London and Frankfurt increased at the start of the session. Shanghai, Tokyo and Hong Kong closed higher.

Investors fear that a global economic recovery will be hampered if rising inflation prompts governments and central banks to withdraw stimulus measures. But a Federal Reserve official helped allay some of those fears when he said the US central bank should not consider changing policy amid the coronavirus pandemic.

“Business at all is booming in Asia today after Wall Street decided overnight that inflation was not an issue,” Oanda’s Jeffrey Halley said in a report.

The London FTSE 100 rose less than 0.% to 7,053.42 and the Frankfurt DAX gained 0.8% to 15,556.60. The CAC in Paris is up less than 0.1% to 6,410.86.

On Wall Street, futures on the benchmark S&P 500 and the Dow Jones Industrial Average rose 0.3%.

On Monday, the S&P rose 1%, recouping about half of last week’s losses. The gains were led by technology stocks.

The Dow added 0.5% while the highly technological Nasdaq Composite gained 1.4%.

In Asia, the Shanghai Composite Index jumped 2.4% to 3,581.34 and the Nikkei 225 in Tokyo jumped 0.7% to 28,553.98. The Hang Seng in Hong Kong rose 1.8% to 28,910.86.

The Kospi in Seoul was 0.9% higher at 3,171.32 and the S & P-ASX 200 in Sydney added 1% to 7,115.20.

The Sensex Indian lost less than 0.1% to 50,615.37. New Zealand declined while Southeast Asian markets advanced.

U.S. stocks hit an all-time high on May 7, then fell amid growing concern over higher inflation as recovering economies disrupt trade or prompt governments to cut stimulus spending and ease the credit.

St. Louis Federal Reserve Chairman James Bullard told Yahoo Finance on Monday that inflation was “not much of a surprise” and that it was not time to rethink monetary policy.

Fed officials said earlier that the US economy would be allowed to “overheat,” with inflation above the central bank’s 2% target, to ensure a recovery.

“I think there will come a time when we can talk more about changing the parameters of monetary policy,” Bullard said. “I don’t think we should be doing it while we are still in the pandemic.”

The S&P 500 is on track for a 0.4% monthly gain as the last season of quarterly earnings reporting draws to a close.

Tech stocks and companies that depend on direct consumer spending made gains, while sectors seen as safe havens like utilities lagged behind.

Nvidia rose 4.1%, while Micron Technology added 2.7%. Among communications actions, Facebook gained 2.7% and Twitter jumped 4.8%.

Bond yields, or the difference between the market price and the payment at maturity, fell as prices rose. This is often taken as a sign that investors are less concerned about inflation, which can erode the value of this payment.

On Friday, the Commerce Department released one of its inflation gauges, the Consumer and Personal Expenditure Index, or Core PCE. The Fed prefers this tool to measure inflation, rather than the consumer price index released earlier this month.

Economists polled by FactSet expect Core PCE to be up 3% from a year ago, which would be above the Fed’s target.

In energy markets, benchmark US crude fell 34 cents to $ 65.71 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose from $ 2.47 to $ 66.05 on Monday. Brent, the base of international oil prices, fell 30 cents to $ 68.07 a barrel in London. He added $ 2.02 the previous session to $ 68.46.

The dollar fell to 108.74 yen from 108.79 yen on Monday. The euro rose to $ 1.2260 from $ 1.2213.