Futures Signal Flagging Rally as Catalysts Sought – Europe Market Wrap

US shares fought for direction as investors sought new triggers to push the rise further. Treasury yields and the dollar increased.

S&P 500 contracts were unchanged on Wednesday after the underlying gauge had climbed in the previous four sessions. The benchmark Treasury yield increased two basis points to 4.48%. Oil dropped to its lowest level since mid-March, following a somewhat pessimistic US inventory data.

Investors winding down from earnings season and the S&P 500’s 3% surge in May are now wary of what happens next, as US authorities warn that betting on a shift to softer policy may be premature. Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, said the central bank is likely to maintain interest rates unchanged “for an extended period of time.”

The Fed’s more cautious approach has put it out of step with European central banks, which have already begun to ease. On Wednesday, Sweden’s Riksbank began its rate-cutting cycle, relaxing policy for the first time in eight years. This follows the Swiss National Bank’s move to lower interest rates earlier than its counterparts in March.