To The Moon

• Euro area factory downturn intensifies on record inflation
• China locks down area around ‘IPhone City’ in blow to Apple

Equities pared gains ahead of the Federal Reserve’s policy meeting Wednesday. A gauge of the dollar fell and gold rose.

US futures and European stocks were little changed amid signs of slowing global growth. US-listed Chinese stocks rallied in premarket trading and the Hang Seng Index rose in a session cut short by a storm warning as growing speculation over China’s reopening spurred another rally in Asia.

VIX rose 1.6% and VIXmain rose 1.3% separately.

Traders are weighing mixed economic data ahead of the Fed meeting, where the central bank is expected to raise interest rates by 75 basis points for the fourth time in a row. The European Central Bank hiked last week at a second straight meeting, and the Bank of England is due to lift its benchmark on Thursday.

Treasury yields were little changed and the yen strengthened in a sign traders anticipate a muted impact of Fed tightening on the currency.

Focus will be on Fed Chair Jerome Powell’s comments following the decision as traders seek clues about where policy is headed.

A continuation of the recent equity rally is contingent on the Fed supporting the “pivot narrative” and the market’s optimism on the matter is“misplaced,”according to Barclays strategists. Former Treasury Secretary Larry Summers also warned that expectations the central bank would pivot were“badly misguided,”saying the Fed should “stay on the current course.”

Investors are grappling with an energy crisis, a looming recession and soaring prices.

Euro-area manufacturing activity sank to the lowest level since 2020 and A.P. Moller-Maersk A/S, a bellwether for global trade, cut its forecast for the global container market, saying demand will shrink as much as 4% this year and price pressures will remain. The company’s shares fell.

Healthcare stocks outperformed in Europe after Novo Nordisk A/S raised its operating profit and sales forecasts for the year.

In premarket trading, Advanced Micro Devices Inc. climbed after an expansion into server processors helped offset a slumping personal-computer market last quarter and the chipmaker vowed to make further gains.

Apple Inc. shares slipped after China ordered a seven-day lockdown of the area around Foxconn Technology Group’s main plant in Zhengzhou, a move that will severely curtail shipments in and out of the world’s largest iPhone factory.

Key events this week:

• EIA crude oil inventory report, Wednesday
• Federal Reserve rate decision, Wednesday
• US MBA mortgage applications, ADP employment, Wednesday
• Bank of England rate decision, Thursday
• US factory orders, durable goods, trade, initial jobless claims, ISM services index, Thursday
• ECB President Christine Lagarde speaks, Thursday
• US nonfarm payrolls, unemployment, Friday

Some of the main moves in markets:

Stocks

• Futures on the S&P 500 were little changed as of 6:20 a.m. New York time
• Futures on the Nasdaq 100 rose 0.2%
• Futures on the Dow Jones Industrial Average were little changed
• The Stoxx Europe 600 rose 0.2%
• The MSCI World index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.3% to $0.9902
• The British pound was little changed at $1.1489
• The Japanese yen rose 0.8% to 147.11 per dollar

Cryptocurrencies

• Bitcoin fell 0.4% to $20,398.77
• Ether fell 1.7% to $1,548.13

Bonds

• The yield on 10-year Treasuries was little changed at 4.05%
• Germany’s 10-year yield advanced one basis point to 2.14%
• Britain’s 10-year yield was little changed at 3.46%

Commodities

• West Texas Intermediate crude fell 0.3% to $88.09 a barrel
• Gold futures rose 0.5% to $1,658.10 an ounce