US equities futures rose lower on Thursday as investors waited for comments from Federal Reserve Chairman Jerome Powell on the outlook for inflation and the central bank’s view of rising securities.
Futures linked to the S&P 500 decreased by 0.4%, indicating that the benchmark could drop after the opening clock for a third consecutive day. Contracts linked to the Nasdaq-100 decreased by 0.6%, indicating further losses for technology stocks. The Dow Jones industrial average fell 0.3%.
A recent sell-off of government bonds has boosted treasury yields and curtailed investors’ appetite for the technology stocks that have risen in a low-yield environment. Some money managers are betting that extra fiscal stimulus in the US will increase inflation and that the Fed will raise interest rates sooner than they expected. This has led to a jump in real yields, or the yield on bonds after adjusting for inflation expectations.
Investors say they hope Mr. Powell will answer questions about how he views the yield in the yield when he speaks at the Wall Street Journal Jobs Summit at 12:05 ET. Central bank officials said earlier that they would abandon monetary policy until the economy is stronger, and that they see the rise in bond yields as a sign that investors are optimistic about the US economic recovery.
“Powell’s remarks today are going to be really important,” said Hugh Gimber, a strategist at JP Morgan Asset Management. “What we’re seeing over the last few weeks is clearly that stocks are being disturbed by the rate of rise in real returns, and that puts the Fed in a difficult space.”