U.S. Futures Rise as Energy, Tech Stocks in Demand: Markets Wrap

On Oct 5, 2021

(Bloomberg) — U.S. equity-index futures rose as investors rushed into energy stocks riding a supply crunch and technology names that had become cheaper after a selloff.

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Contracts on the the Nasdaq 100 Index rose 0.5% after the digital-heavy gauge plunged on Monday to the lowest level since June. S&P 500 futures also climbed by the same degree. Marathon Oil Corp. and Occidental Petroleum Corp. posted some of the biggest gains in New York premarket trading. Facebook Inc. climbed a day after its social-media platforms suffered an outage.

Calm in global markets has been shattered by a surge in energy prices as the northern hemisphere braces for winter demand. That adds to a growing wall of worry spanning a debt crisis in China, elevated inflation, fading recovery and U.S. political bickering. Meanwhile, investors are preparing for a tapering of stimulus by the Federal Reserve as early as next month.

It is “the period of a multiplicity of shocks percolating through the financial markets leaving them in the fog, with many watching from the sidelines for clarity,” Sebastien Galy, a senior macro strategist at Nordea Invetsment, wrote in a note.

European natural gas contracts soared on Tuesday to an unprecedented 114 euros per megawatt-hour, compared with 15.49 euros in February. The continent is bracing for a winter crunch in energy supply, with German front-month power contracts also jumping to record levels. West Texas Intermediate crude headed for a seven-year high.

Marathon and Occidental climbed at least 2% in early New York trading. Facebook Inc. found dip buyers in premarket trading after a 4.9% plunge on Monday amid an hours-long service disruption. The stock added 1.1% in the early New York session.

The technology subgroup in Europe’s benchmark Stoxx 600 advanced for the first time in eight days.

The dollar rebounded from a three-day selloff. Treasury yields pared an increase. Bitcoin extended a rally, trading around the $50,000 mark.

Traders are now turning their attention to Friday’s nonfarm-payrolls data to gauge the timing of the Fed’s taper. An earlier indication of the health of the world’s largest economy will come Tuesday via gauges of U.S. services activity.

In the latest Fed comments, St. Louis President James Bullard said Monday elevated price pressures may be changing the mentality of businesses and consumers by making them more accustomed to higher inflation. Australia’s central bank kept its monetary settings unchanged.

For more market analysis, read our MLIV blog.

Here are some events to watch this week:

Rate decision in New Zealand on Wednesday
Reserve Bank of India monetary policy decision on Friday
The U.S. Labor Department releases unemployment and job creation data Friday

Some of the main moves in markets:

Stocks

Futures on the S&P 500 rose 0.5% as of 8:12 a.m. New York time
Futures on the Nasdaq 100 rose 0.5%
Futures on the Dow Jones Industrial Average rose 0.5%
The Stoxx Europe 600 rose…