Stocks, futures fall with bonds on inflation worry

Stocks fell with U.S. futures as investors weighed inflationary pressures from surging energy prices and risks to global growth ahead of a key employment report. Treasury yields extended an advance.

U.S. futures fell with stocks as surging energy prices stoked inflationary pressures ahead of a key American employment report. Treasury yields extended an advance.

S&P 500 and Nasdaq 100 contracts declined, with tech giants such as Apple Inc. and Facebook Inc. down in premarket trading. European equities slid to a two-month low, with the region’s natural gas prices soaring even as the European Union pledged swift action to ensure the spiking costs don’t stifle the economy. MSCI Inc.’s Asia-Pacific index also dropped.

The pound weakened as a market-based measure of expected inflation in the U.K. over the next decade hit a 13-year high.

Markets have turned more volatile since global stocks hit a record last month, with the energy supply crunch adding to investor worries about inflation, slowing growth and the prospect of reduced Federal Reserve stimulus. A private U.S. payrolls report later today may offer clues on the country’s labor market ahead of Friday’s keenly-watched government data.

“Right now you’re seeing inflation risk really start to percolate and I do think that you’re going to see that really eat into margins as we go through the fourth quarter into 2022,” Erin Browne, multi-asset portfolio manager at Pimco, said on Bloomberg Television. “The energy crisis that’s starting to loom in Europe is a real risk that is being underestimated by the market right now.”