Stocks and U.S. equity futures fell Tuesday, hurt by concerns about elevated inflation stoked by energy costs and the possibility of a widening regulatory crackdown in China.
Treasury yields were steady. MSCI Inc.’s Asia-Pacific index snapped a three-day climb, with the technology sector leading losses and South Korea underperforming. Signs that Beijing is widening its scrutiny of private and state enterprises soured the broader mood. U.S. and European futures retreated following declines on Wall Street as the prospect of a slowing recovery from the pandemic shadowed trading. Oil held above $80 a barrel amid a power crisis from Europe to Asia. China’s thermal coal futures surged to a record for a second day.
The energy crunch is squeezing supplies of aluminum, whose price hit a 13-year high. Other industrial metals have also rallied, fueling inflationary pressures. The 10-year U.S. Treasury yield was little changed as the cash market reopened from a holiday. Aside from inflation, investors also face a looming reduction in Federal Reserve bond purchases. The dollar trimmed an advance.
Meanwhile, global markets are struggling to shake off worries that inflation — spurred by an energy crunch and pandemic-related supply-chain snarls — will sap company profits and economic expansion. Financial firms this week will kick off the third-quarter earnings season, heralding a key test of investor confidence
