US stocks and futures decline amid cautious trading: Markets wrap

(Bloomberg) — European stocks and U.S. stock futures fell as a cautious mood spread across global markets despite recent measures taken by China to support the struggling real estate sector.

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The Stoxx Europe 600 index fell about 0.3% at the open, snapping a four-day rally that left it within two points of its January 2022 record high on Monday.

Mining companies Anglo American Plc and Rio Tinto Plc led basic resource stocks lower after a drop in iron ore prices. The chemicals subsector outperformed, with Air Liquide SA jumping more than 4% after the French gas company beat analysts' expectations with margin expansion. Barclays shares rose as much as 6% after announcing plans for capital returns.

Futures for the Standard & Poor's 500 and Nasdaq 100 indices fell, as US financial markets prepare to reopen after the public holiday on Monday. The 10-year Treasury yield stabilized ahead of the 40-year bond auction. The dollar measure changed little.

Leading maker Nvidia Corp.'s earnings on Wednesday could provide new momentum for stocks as investors try to gauge the strength of the global economy. The chip giant has surpassed Amazon.com Inc's market capitalization, hoping to be the biggest winner from artificial intelligence developments.

“Nvidia’s results on Wednesday could be a turning point for markets,” Charles-Henri Monchaux, chief investment officer at Cease Bank, told Bloomberg TV. “The market relies on very few large-cap stocks, and if they disappoint for any reason, there is a risk of a downturn.”

Elsewhere, Asian shares fell after a cut in China's mortgage benchmark interest rate failed to allay concerns about the world's second-largest bank. 2 Economics. Indices in Japan, Australia and South Korea were all in the red zone. Chinese stocks fluctuated.

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Wheeler Chen, an analyst at Forsyth Barr Asia Ltd., said the cut in the five-year prime loan rate was “a good gesture from commercial banks, but the real estate problem is still not related to the mortgage rate.” “It will boost demand for real estate, but I don’t expect much.”

In Australia, BHP Group, the world's largest mining company, announced core profits of $6.57 billion, below consensus estimates, and said that demand from China, its largest customer, was good despite weakness in the housing sector.

In other corporate news, Capital One Financial Corp. to buy Discover Financial Services in a $35 billion all-stock deal that will make it the largest U.S. credit card company by loan volume.

Other potential catalysts for markets this week include minutes from the Federal Reserve's January meeting due out on Wednesday and euro zone inflation data due on Thursday.

Elsewhere, gold was little changed after rising on Monday to trade around $2,020 an ounce. The price of US West Texas Intermediate crude rose against the backdrop of ongoing tensions in the Red Sea, a vital trade route.

Some key events this week:

• The European Central Bank publishes its euro zone index of negotiated wage rates on Tuesday

• Rio Tinto Plc earnings on Wednesday

• Consumer confidence in the euro zone, Wednesday

• Nvidia earnings on Wednesday

• January Fed meeting minutes, Wednesday

• Atlanta Fed President Rafael Bostic speaks Wednesday

• Eurozone CPI, PMI, Thursday

• The European Central Bank releases its account of the January 25 meeting, Thursday

• Fed Governor Lisa Cook and Minneapolis Fed President Neel Kashkar speak Thursday

• Real estate prices in China today, Friday

• Isabel Schnabel, member of the Executive Board of the European Central Bank, speaks on Friday

Some key movements in the markets:

Stores

• The Stoxx Europe 600 Index was down 0.3% as of 8:20 AM London time

• S&P 500 futures fell 0.3%

• Nasdaq 100 futures fell 0.4%

• Dow Jones Industrial Average futures fell 0.3%

• There was little change in the MSCI Asian stock index

• MSCI Emerging Markets Index rises 0.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• There was little change in the euro at $1.0774

• The Japanese yen fell 0.1 percent to 150.32 yen to the dollar

• There was little change in the yuan in external transactions at 7.2082 to the dollar

• There was little change in the pound sterling at $1.2592

Digital currencies

• Bitcoin fell 0.4% to $51,713.13

• Ethereum fell 1.9% to $2,911.91

Bonds

• The yield on 10-year Treasury bonds was little changed at 4.29%.

• The yield on 10-year German bonds fell two basis points to 2.39%.

• The yield on British 10-year bonds fell two basis points to 4.09%.

Goods

• There was little change in Brent crude

• Gold in spot transactions rose 0.2 percent to $2,022.17 per ounce

This story was produced with assistance from Bloomberg Automation.

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