Stocks Mixed Amid Variant Fears; Dollar Climbs: Markets Wrap

Stocks were mixed and U.S. futures fluctuated on Tuesday as concerns over a highly infectious Covid-19 strain spurred caution among investors. The dollar strengthened.

The Stoxx Europe 600 Index traded higher, though new limits on travel from Britain prompted by the Delta variant of the virus weighed on cruise operators and airlines. An MSCI index of Asia-Pacific shares declined for the first time in six days as countries in the region struggled to contain the highly transmissible strain.

S&P 500 futures were little changed, while contracts on the Nasdaq 100 slipped. Morgan Stanley shares gained more than 3% in pre-market trading after the U.S. bank said it will double its quarterly dividend. Treasuries dipped, and gold headed for the biggest monthly drop in more than four years.

Global stocks are poised to close out their fifth quarterly advance amid a worldwide vaccine rollout that’s powered an economic recovery and sparked concerns about increasing prices and the withdrawal of stimulus measures. The recovery also drove the reflation trade as more economies reopened, though that is being hampered as some countries, especially in Asia, are falling behind in their vaccine strategies.

“The Delta variant has also emerged in our client conversations as a potential threat to reflation/inflation,” JPMorgan Chase & Co. strategists led by Marko Kolanovic said. “The economic consequences are likely to be limited given progress on vaccinations across developed market economies. It could, however, pose some risk of a delay in the recovery in countries where vaccination rates remain lower.”