Stocks climb, US futures rebound after tech sell-off

Global investors are grappling with the recent market turbulence, assessing whether the pullback for equities is a sign of market health or the start of a larger drawdown that has further to go. Picture: Michael Nagle/Bloomberg

Stocks rose in Europe this morning along with US equity futures as optimism crept into markets that Tuesday’s tumble in America may have drawn a line under the recent sell-off.

European shares climbed broadly as investors took in stride news that AstraZeneca Plc had to pause its trials of a leading experimental Covid-19 vaccine when a participant got sick. Contracts on the S&P 500 and Nasdaq 100 advanced in the wake of large declines in America that were led by tech shares.

The selloff in the US picked up steam in Tuesday’s cash session as investors fled the high flyers that fueled a historic five-month rally. Volatility roiled financial markets, sending the Nasdaq 100 down 4.8% and leaving it 11% off its record set last Wednesday. Tesla suffered the worst rout in its history and is now down 34% in September.

Treasuries and the dollar erased their increases as equity futures strengthened. The pound headed for its longest declining streak since March on worries that talks could collapse over changes to the Brexit withdrawal deal.

Global investors are grappling with the recent market turbulence, assessing whether the pullback for equities is a sign of market health or the start of a larger drawdown that has further to go.

“We don’t know exactly if this is the bottom, there could be more volatility,” Laila Pence, president of Pence Wealth Management, said on Bloomberg TV. “We’re taking the froth out of the market.” Elsewhere, Brent crude hovered at around $40 amid further signs of a bleak short-term outlook. Yields on New Zealand’s three-year bonds dropped into negative territory for the first time.