Stocks, futures fall as yields climb; yen tumbles

U.S. index futures declined along with stocks in Europe, while bonds around the globe slumped as investors weighed the prospect of aggressive policy action to curb inflation.

U.S. index futures declined along with stocks in Europe, while bonds around the globe slumped as investors weighed the prospect of aggressive policy action to curb inflation.

Contracts on the S&P 500 and Nasdaq 100 erased early gains to trade lower after U.S. stocks ended little changed Monday. Treasuries extended declines, with the 10-year yield hitting a fresh three-year peak. German and U.K. 10-year yields climbed to the highest since 2015 as bonds across Europe plunged. The dollar edged higher.

Healthcare and consumer-products companies led a decline of more than 1 per cent in the Stoxx Europe 600 index, with technology stocks also underperforming. Energy shares were led higher by TotalEnergies SE on a positive first-quarter report. 

Investors -- already betting on an almost half-point Federal Reserve rate increase next month -- are reassessing tightening expectations after St. Louis Fed President James Bullard said that hikes of as much as 75 basis points -- while not the base case -- shouldn’t be ruled out. The last increase of such magnitude was in 1994. 

Disruptions to supply chains from China’s lockdowns and to commodity flows from the war are keeping pressure on central banks to rein in runaway prices at a time when global growth is tipped to slow. The World Bank cut its forecast for global economic expansion this year on Russia’s invasion.