(Bloomberg) — European stocks and US futures surged as attention turned from tensions in the Middle East to corporate profits and economic figures to gain insight into the course of central bank policy.
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The Stoxx Europe 600 index rose by 0.5% while S&P 500 futures saw a similar uptick after the US index experienced its toughest week since March 2023. Key indices across Asia recovered from the setbacks of the previous week as investors found relief in the absence of further conflict between Iran and Israel in the wake of Israel’s reprisal.
The demand for safe-haven assets decreased as US Treasuries and the dollar showed volatilities last week due to Middle East tensions and hawkish remarks from Federal Reserve officials signaling a reluctance to reduce interest rates in the near future. Both oil and gold prices declined. The Bloomberg dollar index remained stable as the yield on 10-year US Treasury bonds increased by two points.
“We are witnessing a relief rally taking place this morning as geopolitical risks diminish,” explained Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “This move essentially balances the scales and allows the markets to return to focusing on macroeconomic and corporate fundamentals.”
Regarding individual market players in Europe, shares of Prosus NV saw a rise of over 5% as Tencent Holdings Ltd., of which it is a major stakeholder, experienced the largest surge since February after successfully launching one of the year’s most anticipated mobile games earlier than expected. Galp Energia SGPS SA soared by up to 19% following an update from the Portuguese oil company on a significant oil discovery off the coast of Namibia.
Strong earnings from Corporate America are expected to lift the S&P 500 Index from its recent stagnation, despite growing concerns about a notable increase in bond yields, as per Bloomberg’s latest Markets Live Pulse survey.
With the reporting season ramping up this week featuring results from tech behemoths like Microsoft Corp., Meta Platforms Inc., and Alphabet Inc., almost two-thirds of the 409 participants in the survey anticipate that earnings will boost the US equity benchmark. This marks the highest level of confidence in corporate profits since the survey first posed this question in October 2022.
Nevertheless, with more than half of the…
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