(Bloomberg) — Stocks climbed in Europe and Asia on Tuesday, US equity futures pointed higher and Treasuries retreated amid improved investor sentiment compared with last week’s rout in global shares.
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The Stoxx Europe 600 index climbed, with basic resources leading the advance as most industrial metals gained. Contracts on the S&P 500 and Nasdaq 100 posted a second day of solid gains, signaling US markets are set to rebound following a rout that erased nearly $2 trillion in market value from the S&P 500 last week. MSCI Inc.’s Asia-Pacific index snapped an eight-day slide to add more than 1%.
The drop in Treasuries took the benchmark 10-year yield to about 3.28%. The dollar dipped and the yen hovered near a 24-year low, sapped by the contrast between a super-dovish Bank of Japan and a hawkish Federal Reserve.
Sentiment this week is being helped by comments from President Joe Biden that a US recession isn’t “inevitable,” but the outlook remains parlous for investors weighing whether the market has bottomed. Goldman Sachs Group Inc. economists this week cut their US growth forecasts and warned that the risk of recession is rising.
“There might be a narrative that we’ve hit a bottom, we are oversold, the Fed is taking inflation seriously and that might be slightly bullish in the interim,” Frances Stacy, Optimal Capital director of strategy, said on Bloomberg TV.
St. Louis Fed President James Bullard warned that US inflation expectations could “become unmoored without credible Fed action,” while former Treasury Secretary Lawrence Summers argued that the nation’s jobless rate would need to rise above 5% for a sustained period in order to curb price pressures.
Earlier, European Central Bank President Christine Lagarde restated officials’ intention to raise interest rates in July and September, signaling that concerns over financial-market tensions aren’t derailing the fight against inflation.
Elsewhere, crude oil gained and gold slipped. Bitcoin scaled $21,000 as cryptocurrencies got a reprieve from recent…