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U.S. stock index futures were slightly higher in premarket trading early Wednesday after Treasuries recovered from a sharp sell-off that took yields to fresh 16-year highs in the previous session, while ADP reported that private-sector employment increased less than expected last month.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+0.38%
rose 10 points, or 0.2%, to 4,275 -
Dow Jones Industrial Average futures
YM00,
+0.27%
added 56 points, or 0.1%, to 33,251 -
Nasdaq 100 futures
NQ00,
+0.54%
gained 53 points, or 0.3%, to 14,762
On Tuesday, the Dow Jones Industrial Average
DJIA
fell 431 points, or 1.29%, to 33002, the S&P 500
SPX
declined 59 points, or 1.37%, to 4229, and the Nasdaq Composite
COMP
dropped 248 points, or 1.87%, to 13059.
What’s driving markets
Equity-index futures were slightly higher Wednesday morning after payroll processor ADP said U.S. private-sector employment rose by a tepid 89,000 in September. Economists polled by the Wall Street Journal had forecast a gain of 150,000.
U.S. bond yields eased lower after hitting fresh 16-year highs in the previous session. The yield on the 2-year Treasury
BX:TMUBMUSD02Y
slipped by 4 basis points to 5.1%, while the yield on the 10-year Treasury
BX:TMUBMUSD10Y
dropped 5 basis points to 4.752%.
See: Rising Treasury yields are upsetting financial markets. Here’s why.
The choppiness came after the S&P 500 shed 1.4% on Tuesday to close at its lowest level since the start of June as investors balked at the sight of benchmark borrowing costs hitting fresh 16-year highs in a reflection of concerns that a sturdy U.S. economy will cause the Federal Reserve to keep interest rates higher for longer.
The trend is being felt globally, with benchmark German bund yields
BX:TMBMKDE-10Y
and U.K. gilts
BX:TMBMKGB-10Y
hitting multi-year highs, too, while the DAX equity index
DX:DAX
in Frankfurt trades at its lowest since March.
“We’re at risk of repeating ourselves on a daily basis now, but the last 24 hours saw the relentless bond sell-off continue, with yields rising to fresh multi-year highs on both sides of the Atlantic,” said Jim Reid, strategist at Deutsche Bank.
“I struggle to see how the recent yield moves don’t increase the risk of an accident somewhere in the financial system given the relatively abrupt end over recent quarters of a near decade and a half where the authorities did everything they could to control yields,” Reid added.
U.S. economic updates set for release on Wednesday also include the final reading of the S&P services PMI for September at 9:45 a.m. ET, as well as the August factory orders and the September ISM services report, both at 10 a.m.
There will also be more chatter from Federal Reserve officials. Fed Governor Michelle Bowman is due to speak at a banking conference at 10:25 a.m., and Chicago Fed President Austan Goolsbee will give welcoming remarks at banking symposium, starting at 10:30 a.m.
Companies in focus
-
Apple Inc.
AAPL,
-0.78%
fell 0.8% in premarket trading on Wednesday after KeyBanc’s Brandon Nispel cut his rating on the technology behemoth to sector weight, after being at overweight for at least two years. He said shares of the iPhone maker are trading near all-time high valuation and U.S. iPhone sales are likely to struggle. -
Moderna Inc.
MRNA,
-0.22%
rose 0.5% in premarket trading after the company said its combination vaccine to protect against both COVID-19 and influenza generated a strong immune response compared to individual shots for the viruses in an early-stage study. -
Intel Corp. shares
INTC,
+0.65%
were up nearly 2% after the chip maker said it would follow up last year’s spinoff of Mobileye Global Inc.
MBLY,
-4.51%
with an IPO of its programmable solutions group in the next few years. -
Cal-Maine Foods Inc.
CALM,
-0.04%
tanked 12% after the egg producer reported quarterly results well below investors’ expectations and said the average price for a dozen eggs fell to $1.59 from $2.28 a year ago.
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