US Futures & Stocks Rise as BoJ Calms Nerves- Europe Market Wrap

Stocks rose after the BoJ sought to soothe markets following historic volatility caused in part by its unexpected interest rate hike last week.

Futures for the S&P 500 and Nasdaq 100 rose after the underlying indexes rallied more than 1% on Tuesday after a wave of dip buying. The Stoxx Europe 600 index increased by more than 1%, with mixed earnings results from some of the region’s largest corporations doing little to temper the risk-on sentiment. Japanese stocks sparked a sweeping surge throughout Asia.

BoJ’s Deputy Gov. Uchida delivered a strong dovish signal by promising not to raise interest rates while markets are volatile. The Yen fell by more than 2% versus the Dollar following his remarks, which were the first from a BoJ board member since the bank hiked rates on July 31st.

That rate hike triggered a three-day decline in Japanese stocks, a jump in the Yen, and a quick unwinding of the currency carry trade, all of which weighed down risk assets globally. Worries over a slowing US economy and sky-high valuations for tech companies contributed to a stunning selloff on Monday, capping a three-week, $6.5 trillion stock wipe-out.