[ad_1]
U.S. stock futures were struggling for momentum Tuesday as the recent surge in bond yields continued to suppress investor sentiment.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+0.02%
rose 3 points, or 0.1%, to 4327 -
Dow Jones Industrial Average futures
YM00,
+0.01%
added 19 points, or 0.1%, to 33657 -
Nasdaq 100 futures
NQ00,
-0.07%
eased 4 points, or 0%, to 14981
On Monday, the Dow Jones Industrial Average
DJIA
fell 74 points, or 0.22%, to 33433, the S&P 500
SPX
increased 0 points, or 0.01%, to 4288, and the Nasdaq Composite
COMP
gained 88 points, or 0.67%, to 13308.
What’s driving markets
Bonds remain the prime focus of traders. Stocks started the week and fourth quarter on a volatile note after the 10-year Treasury yield
BX:TMUBMUSD10Y,
the global benchmark, hit a fresh 16-year high of 4.70%.
“’The hangover from strong economic data in the U.S. is still being felt, with the headache increasing about the likelihood of high interest rates setting in rattling nerves,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
However, a steady showing for Treasuries early Tuesday allowed stock futures to nudge a fraction higher.
The latest rise in yields came after Washington over the weekend averted a government lockdown that may have damaged the economy; the ISM manufacturing survey for September was stronger than expected; and Fed officials Michelle Bowman and Michael Barr both reiterated the central banks’ predeliction for keeping interest rates higher for longer as they battle sticky inflation.
Such higher implied borrowing costs — especially when rising quickly — tend to be a drag on equities, particular those of smaller companies which may struggle to raise financing.
The Russell 2000 small cap index
RUT
closed Monday off 1.6%, leaving it down 0.25% for the year to date. The S&P 500 finished barely changed on Monday, but this mainly reflected strength in large, highly cash-generative technology stocks.
“The breadth of losses outside of tech was highlighted by the [S&P 500] equal weight index declining -1.11% with only 22% of the S&P 500 constituents up on the day despite its flat headline performance,” said Jim Reid, strategist at Deutsche Bank.
The path for bond yields and thus probably stocks over the short term may depend on a batch of jobs-related data in coming days. The August job openings report, or JOLTS, is due Tuesday at 10 a.m. Eastern, the September ADP private sector employment report is released Wednesday, followed on Thursday by weekly initial unemployment claims. Then, Friday sees the all-important nonfarm payrolls report for September.
Atlanta Fed President Raphael Bostic takes part in a roundtable discussion starting at 8 a.m. on Tuesday.
[ad_2]
Source link
