- US stock futures rose Tuesday in cautious trade after a losing day with recession worries still in focus.
- Expect more volatility as big investors rebalance their holdings in the quarter's final days, analysts said.
- Oil prices climbed for the fourth day in a row as the G7 moved closer to a deal on a Russian price cap.
Global stocks rose Tuesday after China eased up on its COVID-zero policy, lifting hopes for global growth, and oil prices rallied for the fourth day in a row.
US stocks looked set for a higher open after losing grip on a big rebound in a choppy session Monday. S&P 500 futures were up 0.54%, and Dow Jones futures were 0.59% higher, while futures on the tech-heavy Nasdaq climbed 0.48%.
Analysts said more volatility in stocks is likely as institutional investors adjust their holdings in the last few days of trading before the third quarter begins Friday.
"it is the month and quarter-end this week, and that will prompt no small amount of portfolio rebalancing by institutional investors globally," Jeff Halley, senior market analyst at OANDA, said in a note. "We should expect the back-and-forth chop-fest to continue this week in the equity space."
Global stocks gained slightly, with the MSCI World Index up 0.18%.
After fretting about inflation as a driver of aggressive interest-rate hikes for much of 2022, investors' focus appears to have now turned to the prospects for recession, which could prompt central banks to ease up on tightening plans.
China on Wednesday halved the quarantine requirement for inbound travelers, a big shift in its policy of restrictions to curb the spread of COVID-19. That and news that Shanghai and Beijing had no new infections Monday lifted hopes for global growth with the supply squeeze in the world's second-biggest economy set to ease.
"The COVID crisis appears to be rapidly retreating in China, with no major cities in widespread lockdown and a rapid drop in cases being reported," Susannah Streeter, a market analyst at Hargreaves Lansdown, said.
Meanwhile, the People's Bank of China said it will keep interest rates low to support the economy, another bullish growth signal.
In Asia, the Shanghai Composite climbed 0.89%, and Hong Kong's Hang Seng jumped 0.85%. Tokyo's Nikkei 225 closed 0.66% higher.
Elsewhere, the pan-European STOXX 600 rose 0.65% after European Central Bank President Christine Lagarde said the central bank is ready to raise interest rates at a faster pace if inflation keeps surging. Paris's CAC 40 index led the rally, rising 1.23%, while Frankfurt's DAX 40 was up 0.75% and London's FTSE 100 added 1.21%.
Federal Reserve Chair Jerome Powell and Lagarde are due to speak at the ECB's summit in Portugal on Wednesday. Investors will watch for whether Powell will expand on his comments last week that the Fed is "not trying to provoke" a recession as it hikes interest rates.
Oil continued to extend its gains Tuesday, as China's COVID easing lifted demand hopes and as supply pressures mounted. News that the G7 is ready to explore details of a price cap on Russian oil was also in focus.
Saudi Arabia and the UAE are both at full production capacity, France's President Emmanuel Macron told his US counterpart Joe Biden as the G7 meeting, according to Reuters.
Global oil benchmark Brent crude was up 1.87% to $113.06 a barrel, while US benchmark WTI crude added 1.67% to $111.40 a barrel, rising back above the $110 level.