NEW YORK (Reuters) – Asian stocks were set for a bumpy start to the second half of the year on Wednesday as optimism about a global economic recovery from the pandemic jousted with signs in the United States the health crisis may not yet be past its peak.

Stocks futures were mixed in early Asian trade with e-mini for the S&P 500 down 0.19% while with Japan’s Nikkei 225 futures rose 0.2%. Hong Kong’s Hang Seng index futures lost 0.42% and Australian S&P/ASX 200 futures were down 0.1%.

The highest ranking U.S. medical official, Anthony Fauci, forecast dire consequences for the world’s largest economy if cities did not re-embrace masks and social distancing measures as COVID-19 cases surged around the country.

Despite these concerns, growing cases in the U.S. are unlikely to rock markets the same way the initial outbreak did in March, Capital Economics analyst Franziska Palmas said in a note.

“Central bank backstops put in place in March have been essential in preserving calm in money markets,” the note read.

U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell on Tuesday pledged to do more for the U.S. economy as it battles the enormous fallout from the virus outbreak.

That assurance helped push Wall Street higher to close out the best quarterly rebound in nearly two decades, and pushed the safe-haven dollar slightly lower.

MSCI’s gauge of stocks across the globe gained 1.04% as the S&P 500 gained 1.54%.

The dollar index fell 0.04%, with the euro up 0.02% to $1.1233.

The Bank of Japan, meanwhile, released a new schedule for bond purchases on Tuesday, which signaled the monetary authority would not be more aggressive on longer maturity bonds.

Still, gold prices rallied as some investors fled to safety after Fauci’s warning that the U.S. daily case-load could reach 100,000 from the current 40,000.

U.S. gold futures settled up 1.1% at $1,800.5.

Oil prices slumped after Libya’s state oil company said it made progress in talks to resume exports, potentially boosting supply.

U.S. crude was down 43 cents, or 1%, at $39.27 a barrel.

Longer U.S. Treasuries rose during Tuesday trading as investors rebalanced their portfolio to round out the first half of the year.

The benchmark 10-year yield was last up 1.7 basis points at 0.6528%.

Reporting by Imani Moise; Editing by Sam Holmes

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