A short-lived bounce for global stocks faded on Thursday, as easing U.S. inflation expectations were overshadowed by fears about an economic downturn.
Futures markets indicated Wall Street’s benchmark S&P 500 share index would drift 0.2% lower at the opening bell, having gained 1.5% in the previous session. Contracts on the tech-focused Nasdaq 100 also fell 0.2% .
Easing gas prices pulled U.S. consumer 12-month inflation expectations down to 6.7% this month, the lowest since September 2021, data showed on Wednesday.
Meanwhile a separate survey the previous day showed U.S. consumer confidence rose to its highest since April, beating expectations of economists polled by Reuters, while strong results from Nike also pulled Wall Street higher.
“We are still in a bear market,” said Luca Paolini, chief strategist at Pictet Asset Management. “You get the odd short rally and then it goes flat. There is very low conviction. The only conviction is that there is going to be a recession.”
The S&P 500 is on course to end the year almost 19% lower, while MSCI’s broad gauge of world stocks (.MIWD00000PUS) has dropped by the same amount, falling for eight of the last 12 months.
The Federal Reserve raised its main interest rate by 50 basis points in its seventh hike of the year in December. Money managers see the Fed’s tightening campaign as likely to hasten the U.S. economy into recession, which should in turn cause stubbornly high inflation to turn lower.
“The view is that we are...
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