Treasuries ease as traders await retail, producer prices data
by Andre Janse van Vuuren and Julien Ponthus
US stock futures eased after a tech-fueled rally in the S&P 500, as traders look ahead to a slate of economic data to gauge whether optimism over a potential Federal Reserve interest-rate cut can hold up.
Contracts on the US benchmark were 0.2% lower after the biggest two-day advance since May. Nasdaq 100 futures slipped 0.3%. Alphabet Inc. rose 2% in premarket trading after a report said the Google parent is stepping up efforts to challenge Nvidia Corp. in the AI chip market. Nvidia fell more than 3%.
In Europe, the Stoxx 600 was little changed. Asia’s regional benchmark climbed 0.6%, buoyed by gains in Chinese shares after Presidents Donald Trump and Xi Jinping held their first talks since agreeing to a tariff truce last month. SoftBank Group shares tumbled 10% on concern Alphabet’s Gemini AI model could boost competition for OpenAI, a key SoftBank investment.
Traders are watching US data ahead of the Thanksgiving holiday, including September retail sales and producer prices due later Tuesday. Though dated by the shutdown, the reports may still matter with little fresh data before the Fed meets next month.
“The market reaction could be larger than usual and may very well affect sentiment surrounding the FOMC December meeting,” Danske Bank A/S analysts wrote in a note.
US Treasuries eased ahead of the data, with the 10-year yield rising one basis point to 4.03%. Gold and the dollar slipped, while Bitcoin fell below $87,000.
Money markets are pricing in about a 75% chance of a Fed rate cut at the December meeting. The odds have fluctuated in recent weeks, though climbed steadily after dovish remarks from policymakers signaling support for the labor market.
Markets are taking a breather Tuesday after a volatile stretch, amid growing concern that this year’s AI-fueled rally may be drifting into bubble territory. A lack of economic visibility due to the data blackout, along with widening divisions between Fed doves and hawks, have also kept traders guessing about the central bank’s next move.
“It’s really quite unique in the history of the Fed to have such a confrontation of hawkish and dovish narratives,” said Raphael Thuin, head of capital market strategies at Tikehau Capital. “The lack of visibility on the Fed’s next move could be a big risk this year and for 2026 too.”
What Bloomberg Strategists Say...
“Nvidia shares have come under pressure this morning on reports of increased competition in AI chips, a development likely to add to an already shaky risk backdrop. More competition naturally raises questions about the company’s future profitability, as it implies reduced pricing power. There may appear to be limitless demand for chips, but at some point, that demand will meet its limit.”
——Skylar Montgomery Koning, macro strategist. For the full analysis, click here.
Corporate Highlights:
- ABN Amro Bank NV plans to cut almost 20% of its workforce as new Chief Executive Officer Marguerite Berard seeks to boost profitability.
- EasyJet Plc said it’s receiving aircraft from Airbus SE at a growing rate, helping the UK budget carrier improve capacity as demand for low-cost travel remains high.
- Nvidia Corp. shares fell on a report that Meta Platforms Inc. is in talks to spend billions on Google’s AI chips.
- European car sales climbed for a fourth straight month in October, as the region’s automakers continue to push out more affordable electrified models.
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 was little changed as of 9:45 a.m. London time
- S&P 500 futures fell 0.2%
- Nasdaq 100 futures fell 0.3%
- Futures on the Dow Jones Industrial Average fell 0.2%
- The MSCI Asia Pacific Index rose 0.6%
- The MSCI Emerging Markets Index rose 0.9%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.1534
- The Japanese yen rose 0.4% to 156.20 per dollar
- The offshore yuan rose 0.3% to 7.0859 per dollar
- The British pound rose 0.2% to $1.3136
Cryptocurrencies
- Bitcoin fell 2% to $86,967.14
- Ether fell 2.5% to $2,885.96
Bonds
- The yield on 10-year Treasuries was little changed at 4.03%
- Germany’s 10-year yield was little changed at 2.69%
- Britain’s 10-year yield was little changed at 4.54%
Commodities
- Brent crude fell 0.7% to $62.91 a barrel
- Spot gold fell 0.2% to $4,128.44 an ounce
This story was produced with the assistance of Bloomberg Automation.
Copyright Bloomberg News
