U.S. Stock Futures Edge Lower, Bond Yields Stabilize

A sharp rally in U.S. government bond yields slowed, with the yield on the 10-year U.S. Treasury note hovering around 2.375% in recent trading, unchanged from the day before. The last time the yield on the benchmark note traded around that level was May 2019. Yields climb when bond prices fall.

Global stock markets have turned a corner in recent days, despite anxieties about mounting inflation and the war in Ukraine. The S&P 500 has advanced 1% or more in five of the last six sessions, bringing it up 8.1% over that period and erasing all of the losses the benchmark index has seen since Russia invaded Ukraine. Major indexes in Europe and Asia have seen similar moves. 

The recent rally has come even as Russia’s attacks on Ukraine intensify, Western countries continue to pile on sanctions and pricing pressures show no signs of abating. On Wednesday, fresh data on inflation showed that consumer prices in the U.K. rose 6.2% in February compared with a year earlier, up from 5.5% in January, marking the highest rate since March 1992. 

The reading, however, did little to rattle European investors Wednesday. The pan-continental Stoxx Europe 600 index rose 0.1% and London’s FTSE 100 climbed 0.3%. In early trading, the European rally was fairly broad based, with Telecom Italia, materials company Umicore and Belgian pharmaceutical company UCB each rising 1% or more.

In premarket trading in New York, shares of meme stocks—which have largely slumped this year—enjoyed a resurgence. Shares of GameStop climbed 11% after the company’s chairman, Ryan Cohen, disclosed his firm bought 100,000 shares of the company’s stock on Tuesday. Shares of AMC Entertainment Holdings, which tend to move in correlation with GameStop, climbed 6.5%.

Meanwhile, shares of Adobe slumped 3.1%. The software company reported higher profit and better-than-expected revenue growth Tuesday, but said it expects a hit to annual revenue from the war in Ukraine.

Brent crude, the international benchmark, rose 1.1% to $116.79. Crude prices have swung between gains and losses in choppy trading this week as investors weigh the likelihood of a European Union-wide ban on the purchase of Russian oil.

In European bond markets, the yield on the benchmark 10-year German bund traded around 0.485%, its highest yield since 2018, after topping 0.5% this week. 

Early signs emerged Wednesday that investors were eyeing assets they perceive as safer. The ICE U.S. Dollar index, which tracks the currency against a basket of others, rose 0.1% in recent trading. Gold prices advanced 0.3%. 

In Asia, major indexes mostly finished higher. Hong Kong’s Hang Seng gained 1.2%, while Japan’s Nikkei 225 jumped 3%. China’s Shanghai Composite advanced 0.3%.

Write to Caitlin McCabe at [email protected]