Interest rate long-haul weakens US equity futures

investmentnews.com:

The buoyant mood sparked by China’s latest economic support measures didn’t last long on Tuesday as European stocks and US futures wavered after policy makers’ warnings of higher-for-longer interest rates.

The Stoxx Europe 600 index pared an early gain after Governing Council member Francois Villeroy de Galhau said the European Central Bank is nearly finished hiking, but added that interest rates will stay at “high plateau” for some time. Trading volumes on the Stoxx Europe 600 were about one-third lower than the 20-day average for this time of day. The UK’s stock benchmark fell as the latest wage data added pressure on the Bank of England to keep raising rates. Bonds rose, with the German 10-year yield falling three basis points to 2.61%.

Luxury-goods makers, miners and construction companies advanced in Europe after China announced measures to support its ailing real estate sector and signaled there may be more stimulus on the way. LVMH gained more than 1% while L’Oreal SA and Richemont also rose. Daimler Truck Holding AG jumped as much as 3.1% after announcing a stock buyback. 

Futures on the S&P 500 and Nasdaq 100 struggled build on Monday’s modest gains after several Federal Reserve officials reiterated the need to tighten further his year, fueling concerns the world’s biggest economy may tip into a recession. Treasury yields fell and a gauge of the dollar declined for a third day.

While central bank officials in Europe and the US are increasingly suggesting they’ve reached a turning point in the battle against inflation, they’re also warning that higher rates for longer are needed to ensure price stability. That’s a mixed blessing for stock bulls who have had to endure a disappointing start to the second half after