Global stocks rebounded Wednesday as investors weighed whether the recent selloff was the beginning of the end for the yearslong bull market or a temporary setback.
The Stoxx Europe 600 was up 0.3% in mid-morning trade, as a bounce in oil prices helped steady sentiment. Asian markets were mixed.
On Wall Street, futures pointed to opening gains of 0.4% for the S&P 500 and 0.3% for the Dow Jones Industrial Average. A selloff Tuesday wiped out yearly gains for both indexes.
Tech stocks also looked poised to open higher after their recent turbulent stretch, with Nasdaq Composite futures up 0.6%.
The jitters added to a volatile stretch for markets that has led some market participants to question whether the 10-year bull market is running out of steam. A cocktail of factors, ranging from concerns about global growth, international trade frictions and a selloff in the tech sector have weighed on indexes in 2018.
Many investors, however, see little evidence of a looming recession and point to still strong corporate earnings.
“The bull market is still intact and this dip is temporary, due to some well known concerns,” said Craig Callahan, president of investment firm Icon Advisers. “A recession is still a few years away.”
“We are not selling, we are riding through this,” he added.
UBS Global Wealth Management said in a note to clients that it has recently increased allocations to global equities in the view that the markets are already pricing in growth and trade risks.
“We view the selloff as overdone and a bull market correction, with valuations that have become more compelling,” the asset manager said.
Traders will be able to gauge the strength of the U.S. economy as a slew of economic data will be published later Wednesday, including durable goods numbers, jobless claims and existing home sales.
Oil prices rebounded Wednesday after sinking deeper into a bear market Tuesday on concerns about oversupply. Brent, the international price gauge, was up 1.8% to $63.66 (U.S.) a barrel, after a 6.4% tumble in the previous session. Data released late Tuesday indicating a decline in U.S. crude inventories helped sentiment.
“While we expect prices to eventually recover, we continue to expect high price volatility until evidence that the oil market fundamentals are improving, requiring a decline in [Organization of the Petroleum Exporting Countries] production and signs that demand growth is resilient,” analysts at Goldman Sachs said in a note to clients.
Investors also watched for the latest moves in the trade dispute between U.S. and China. The focus is now on a meeting between President Trump and President Xi Jinping, set for the end of November at the Group of 20 nations summit in Buenos Aires.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was down 0.1%. The 10-year U.S. Treasury yield rose to 3.076%, compared with 3.050% Tuesday. Yields move inversely to prices.
In Europe, investors were watching for the latest developments in the Brexit negotiations amid reports that Prime Minister Theresa May is heading to Brussels to complete a deal she clinched with the European Union on the U.K.’s exit from the bloc.
The pound gained 0.1% against the dollar to $1.2799.
In Asia, Hong Kong’s Hang Seng rose 0.5% while Japan’s Nikkei Stock Average was down 0.4%. China’s benchmark Shanghai Composite Index rose 0.2%.