Asian stocks and U.S. futures climbed on Tuesday after global equities hit their lowest level since 2016. The dollar snapped a 10-day rally.

Contracts on the S&P 500 rose about 3%, on par with what the index lost Monday. Benchmarks in Tokyo, Sydney and Hong Kong climbed more than 2%, and Korean shares jumped more than 5%. The dollar retreated against developed and emerging currencies alike, in a tentative sign of reduced stress after the steepest appreciation since the global financial crisis. Oil rose and Treasuries were, for once, little changed.

Tuesday’s gain in risk assets followed an unprecedented move by the Federal Reserve to serve as a backstop for large swathes of the U.S. financial system, as borrowers face payment challenges amid economic shutdowns. JPMorgan Chase & Co. analysts flagged the potential for a break in “self-reinforcing negative feedback loops," highlighting a likely inflow into stocks from asset managers rebalancing portfolios.

Still, actions on the fiscal side in major economies remain pending, and the U.S. Congress has failed so far to find a bipartisan compromise. With history replete with evidence of proverbial dead-cat bounces, many are resolved to sit on the sidelines.

“There’s potentially more downside," Jingyi Pan, a strategist at IG Asia Pte in Singapore, said on Bloomberg TV. “There’s not too much more downside from here, but in terms of expecting things to go up, it’s still a little bit too early at this point."

Here are the main moves in the market:

Stocks

S&P 500 futures rose 3.1% as of 10:40 a.m. in Tokyo. The S&P 500 Index fell 2.9% as of 4 p.m. in New York; the Dow Jones Industrial Average lost 3%.

Topix index rose 2.7%.

Australia’s S&P/ASX 200 Index rose 3.2%.

South Korea’s Kospi index gained 5.4%.

Hong Kong’s Hang Seng Index rose 3.4%.

Shanghai Composite gained 1.6%.

Currencies

The yen rose 0.7% to 110.45 per dollar.

The euro gained 0.7% to $1.0796.

The British pound gained 0.7% to $1.1620.

China’s offshore yuan was at 7.0968 per dollar, up 0.4%.

Bonds

The yield on 10-year Treasuries was little changed at 0.78%.

Australia’s 10-year bond yield fell about five basis points to 0.87%.

Commodities

West Texas Intermediate crude rose 5.1% to $24.56 a barrel.

  • Gold climbed 1.2% to $1,572 an ounce.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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