(Bloomberg) -- US equity futures fell Monday and Asian stocks headed for a choppy start, hampered by the challenges swirling around China and a reminder from Federal Reserve officials that their key goal is restraining inflation.
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S&P 500 and Nasdaq 100 contracts shed about 0.5%, while futures rose for Japan and Australia but fell for Hong Kong. The hints of caution follow the best month for global shares since 2020, which pared their slump this year to 16%.
The dollar was firm, oil retreated and Bitcoin slid. Treasuries begin August with the 10-year yield at 2.65%, down from June's peak near 3.50%.
Recent data and developments underlined the economic and regulatory challenges facing China, including a surprise contraction in factory activity that illustrated the cost of Beijing's preference for mobility curbs to tackle Covid.
On Friday, Alibaba Group Holding Ltd. sank in Wall Street trading after being added to a list of firms facing US delisting for failing to provide access to audits. That pushed down the Nasdaq Golden Dragon China Index.
Meanwhile, Fed Bank of Minneapolis President Neel Kashkari said the central bank is committed to reaching its long-term inflation goal of 2%. The personal consumption expenditures index -- the basis for the Fed's inflation target -- is significantly higher, rising 6.8% in June from a year earlier.
A slowing economy has cooled expectations for the scale of the Fed interest-rate hikes needed to tame high inflation, spurring a July rebound in both stocks and bonds. But officials may be wary market rallies that loosen financial conditions and thus imperil the goal of curbing demand to fight price pressures.
"Markets want to trade the 'peak rates' narrative, which has given risky assets some breathing room," wrote Eric Robertsen, chief strategist at Standard Chartered Bank Plc. He expects some "short-covering of underweight risk exposure" in August but warned that investors have to digest a lot of data, including inflation readings, before the next Fed meeting in September.
In China, property-sector woes remain another impediment. Sales at top developers slumped and China Evergrande Group didn't deliver a preliminary restructuring plan by the end of July as promised.
Elsewhere, investors are monitoring US House Speaker Nancy Pelosi's trip to Asia. A statement from her office skipped any mention of a possible stopover in Taiwan. A visit may stoke US-China tension over the island.
What to watch this week:
Airbnb, Alibaba, BP and HSBC are among earnings reports
PMIs from US, China and euro area, among others, Monday.
US construction spending, ISM manufacturing, Monday.
Reserve Bank of Australia rate decision, Tuesday.
US JOLTS job openings, Tuesday.
Chicago Fed President Charles Evans, St. Louis Fed President James Bullard due to speak at separate events, Tuesday.
OPEC+ meeting on output, Wednesday.
US factory orders, durable goods, ISM services, Wednesday.
BOE rate decision, Thursday.
US initial jobless claims, trade, Thursday.
Cleveland Fed President Loretta Mester due to speak, Thursday.
US employment report for July, Friday.
Some of the main moves in markets:
S&P 500 futures fell 0.3% as of 8:40 a.m. in Tokyo. The S&P 500 rose 1.4% on Friday
Nasdaq 100 futures dropped 0.3%. The Nasdaq 100 rose 1.8% on Friday
Nikkei 225 futures climbed 0.6%
S&P/ASX 200 futures increased 0.7%
Hang Seng futures fell 0.3%
The Bloomberg Dollar Spot Index rose 0.1%
The euro was at $1.0220, down 0.1%
The Japanese yen was at 133.53 per dollar, down 0.2%
The offshore yuan was at 6.7501 per dollar
The yield on 10-year Treasuries declined three basis points to 2.65% on Friday
West Texas Intermediate crude was at $97.73 a barrel, down 0.9%
Gold was at $1,761.24 an ounce, down 0.3%
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