Dow futures fell more than 200 points as U.S. stocks were in the red on Wednesday, after a spike in U.S. Treasury yields already had restive investors weighing whether recent data will shift yields.
Futures on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both fell 0.6% after a lackluster session. Contracts on the Nasdaq 100 (NQ=F) fell about 0.7%.
Stocks are selling off as investors consider a rise in US bond yields after a government bond auction flopped. This reflects concerns that the Federal Reserve will keep interest rates high for longer. These concerns seemed to overshadow hopes for AI growth that lifted the Nasdaq to a record in the slipstream of Nvidia’s (NVDA) post-earnings rise.
Five-year Treasury yields rose to their highest level in nearly four weeks on Tuesday, while the 10-year yield (^TNX) rose above the key 4.5% level. On Wednesday, the benchmark yield rose further, trading around 4.56%.
Investors are trying to figure out what Tuesday’s stronger-than-expected consumer confidence means for the Fed’s policymaking, but they are prepared to wait a long time for a reversal in rate cuts after a litany of warnings from its officials.
Read more: What influence does the labor market have on inflation?
The release of the Fed’s Beige Book later Wednesday could shed more light ahead of Friday’s reading on the PCE, the central bank’s preferred inflation gauge.
Live1 update
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The economic prospects are improving…
And who doesn’t want some sunny, positive macro data on hump day? Not this man, always looking for happy things.
I come armed with a dose of just that.
More than eight in ten chief economists expect the global economy to strengthen or remain stable this year, according to a new survey from the World Economic Forum (WEF). That’s almost double the share in the January report.
The share of those predicting a downturn in global economic conditions fell to 17% from 56% in January.
Inflation could have even more room to cool, according to new research from the World Economic Forum. (World Economic Forum)
