U.S. Futures Slump in Risk-Off Mood; Dollar Rises: Markets Wrap

(Bloomberg) — Markets turned sharply risk-off before U.S. markets opened, with declines across S&P 500 equity futures and European stocks, while the dollar strengthened.

S&P 500 contracts sank 1%, with the deepest losses in the small-cap futures. Nasdaq 100 Index futures outperformed following a strong sales report from Microsoft Corp. Other big tech companies including Apple Inc., Facebook Inc. and Tesla Inc. are all due to report later on Wednesday.

Meanwhile, GameStop Corp. continued its meteoric rise after Elon Musk tweeted about the company.

The Stoxx Europe 600 Index declined as the European Union and AstraZeneca Plc disagreed over whether a planned call to resolve vaccine delivery delays would take place. The euro fell after a European Central Bank official said it has the necessary tools to avoid any further strengthening of the currency.

chart: S&P 500 has some room to rise along with Treasury yields in UBS's view

© Bloomberg S&P 500 has some room to rise along with Treasury yields in UBS’s view

Investors are also watching for the outcome of the Federal Reserve policy meeting. While the Fed isn’t expected to make policy changes, interest in statement and Chair Powell’s news conference is focused on possibility of guidance about the future of its asset purchase program.

These are some key events coming up in the week ahead:

Apple Inc., Tesla Inc., Facebook Inc. and Samsung Electronics Co. are among companies reporting results.The Federal Open Market Committee monetary policy decision and briefing by Chair Jerome Powell are scheduled for Wednesday.Fourth-quarter GDP, initial jobless claims and new home sales are among U.S. data releases Thursday.U.S. personal income, spending and pending home sales come Friday.

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