US Futures Waver as Traders Await Fresh Rate Clues: Markets Wrap

(Bloomberg) — US equity futures struggled for traction as investors ponder the Federal Reserve’s next policy move following strong data from the world’s biggest economy.

Contracts on the S&P 500 were little changed, while those on the Nasdaq 100 dipped. The S&P 500 is on track for its first weekly decline of the month ahead of Friday’s inflation report and next week’s key monthly jobs numbers, after US GDP data Thursday complicated the outlook for further interest-rate cuts.

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Truckmaker PACCAR Inc. climbed more than 5% in premarket trading after President Donald Trump levied new tariffs on imports of heavy vehicles. Shares in several European peers dropped.

After a $15 trillion rebound in global equities from April’s lows, traders now face a wall of uncertainty as tariff headlines return to unsettle markets and investors fret about inflated valuations for big tech companies. Fed policy, the upcoming earnings season, and the threat of a US government shutdown are also weighing on sentiment. Attention now turns to Friday’s inflation report and key monthly jobs data next week.

“Excitement on AI and Fed rate cuts turbo-charged the bull market and sent global and US equities to new highs,” Barclays Plc strategists led by Emmanuel Cau wrote in a note. “But with much of the Goldilocks narrative arguably in the price now, and positioning higher, investor fatigue is palpable as we hit an air pocket ahead of next week’s non-farm payrolls report and third-quarter earnings.”

The 10-year Treasury yield was little changed, and a gauge of the dollar was flat, set for its biggest weekly advance since the start of August.

The Stoxx Europe 600 index gained about 0.2%, but is still set for back-to-back weekly declines for the first time since June. Daimler Truck Holdings AG and Volkswagen AG’s Traton SE declined, while Sweden’s Volvo AB, which manufactures trucks in the US, gained. Healthcare stocks underperformed following new US duties on pharmaceutical products.

While the tariffs on pharmaceuticals will have little direct impact on most European drug companies, according to Bloomberg Economics, they are a reminder that new trade tensions could arise at any time.

“What this announcement tells us is that we’re clearly not done with US tariffs, there will be more to come,” said Pierre Alexis Dumont, chief investment officer at Sycomore Asset Management in Paris.

The MSCI All Country World Index declined 0.1%, while a gauge of emerging-market stocks dropped more than 1%, the biggest one-day decline in almost two months.

Policy Outlook

Money markets reduced bets on rate cuts after Thursday’s GDP data, projecting about 39 basis points of Fed reductions before the year is over. Divisions within the Fed over the path of rates added to the uncertainty, while Trump’s ongoing effort to remove Fed Governor Lisa Cook is eroding confidence in the central bank’s independence.

Fed Governor Stephen Miran said the US central bank risks damage to the economy by not moving rapidly to lower interest rates, dissenting against the decision to lower rates last week by a quarter percentage point, favoring a half-point cut. Fed Governor Michelle Bowman said inflation was close enough to the central bank’s target to justify more rate cuts because the job market is weakening.

Fed Bank of Chicago President Austan Goolsbee, however, expressed continued concern about tariff-driven inflation and pushed back against any call for “front-loading” multiple rate cuts. His Kansas City counterpart Jeff Schmid signaled the central bank may not need to cut again soon.

In commodity markets, oil headed for its biggest weekly gain in more than three months as Trump increased pressure on buyers of Russian energy. Gold traded just below a record — on track for a sixth weekly gain.

Corporate News:

Trump advanced plans for American investors to buy TikTok’s US operations from its Chinese owner ByteDance Ltd., with officials setting a potential value of $14 billion. Hanwha Aerospace and other Asian defense shares advanced after European diplomats privately told Russia that NATO is prepared to shoot down Russian planes that violate its airspace. Boeing Co. landed an order for as many as 225 aircraft from Turkish Airlines, 50 of them firm commitments. Volkswagen AG is curbing volumes and introducing temporary shutdowns at two German factories. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.2% as of 10:04 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures fell 0.2% Futures on the Dow Jones Industrial Average rose 0.1% The MSCI Asia Pacific Index fell 1% The MSCI Emerging Markets Index fell 1.4% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1677 The Japanese yen was little changed at 149.75 per dollar The offshore yuan was little changed at 7.1419 per dollar The British pound rose 0.1% to $1.3361 Cryptocurrencies

Bitcoin rose 0.4% to $109,595.29 Ether rose 1.2% to $3,934.64 Bonds

The yield on 10-year Treasuries was little changed at 4.17% Germany’s 10-year yield declined one basis point to 2.76% Britain’s 10-year yield declined two basis points to 4.74% Commodities

Brent crude rose 0.2% to $69.53 a barrel Spot gold rose 0.1% to $3,753.56 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Anand Krishnamoorthy, Julien Ponthus and Jan-Patrick Barnert.

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