Stocks Climb From Lowest Since 2016; Dollar Drops: Markets Wrap

U.S. index futures and European stocks rallied alongside Asian shares on Tuesday after global equities hit their lowest level since 2016, while the dollar snapped a 10-day winning streak and Treasuries dipped as appetite for riskier assets revived.

Contracts on the S&P 500 rose well over 4%, more than the underlying gauge lost on Monday, as they edged close to their upper trading curbs. The Stoxx Europe 600 Index jumped, led by energy companies and miners. Benchmarks in Tokyo, Hong Kong and Sydney all climbed at least 3% while Korean shares surged almost 9% as the government announced measures to stabilize financial markets.

The dollar retreated against developed and emerging currencies alike, in a tentative sign of reduced stress after the greenback’s steepest appreciation since the global financial crisis. European bonds tracked Treasuries lower.

About $26 trillion has evaporated from equity markets since mid-February, and investors have been left surveying the wreckage and the chances of a rebound. On the one hand, Wall Street has begun to argue that liquidations are nearing an end with real-money investors like pension funds ready to step in, and there are signs of improvement in some of world’s regions that were hardest-hit by the virus. On the other, the number of infections globally continues to accelerate and many of the largest economies are grinding to a halt.

Tuesday’s gain in risk assets follows an unprecedented move by the Federal Reserve to backstop large swathes of the U.S. financial system. Actions on the fiscal side remain pending, with Congress so far unable to agree a compromise spending deal.

Futures on the S&P 500 Index increased 4.8% as of 8:03 a.m. London time.The Stoxx Europe 600 Index surged 3.2%.The MSCI Asia Pacific Index advanced 4.8%. The Bloomberg Dollar Spot Index sank 1%.The euro increased 1% to $1.0832.The British pound climbed 0.9% to $1.1643.The Japanese yen advanced 0.6% to 110.61 per dollar. Gold climbed 1.3% to $1,573.13 an ounce.West Texas Intermediate crude climbed 5.2% to $24.57 a barrel.

Stocks Climb From Lowest Since 2016; Dollar Drops: Markets Wrap, Bloomberg, Mar 24