The US stock index futures slipped during overnight trading on Wednesday, accelerating the losses of the ordinary trading session, ending the major averages in the red.
Forward contracts linked to the Dow Jones Industrial Average fell 62 points. S&P 500 futures and Nasdaq 100 futures fell 0.3% and 0.5% respectively.
Stocks yielded heavy losses during regular trading as rising bond yields upset investors. The S&P 500 fell 1.3%, while the Dow Jones Industrial Average closed 119 points, or 0.38%, lower. The Nasdaq Composite was the relative underperformer, declining by 2.7% as technology names declined. The index is on track to place its third negative week in a row – the longest weekly losing streak since September.
The weakness occurred when the 10-year treasury yields yielded longer-term gains. The norm rate climbed to a high of 1.49% on Wednesday before retreating slightly. Last week, yields rose to a high of 1.6% in a move that some described as a ‘flash’ rise.
“Our current strategy work indicates robust economic growth this year with a moderate increase in inflation,” said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute. “In trying to read the tea leaves, the weakening of the yield curve reflects in our view the market’s belief that growth and inflation should continue to move back to appropriate levels as the pandemic eases. We view this as positive for equities and others. risk assets, such as commodities, ”he added.
During Wednesday’s session, businesses were linked to the reopening of the economy. Shares of airline and cross-line operators have risen after President Joe Biden said on Tuesday that the U.S. would have enough Covid-19 vaccines for all adults by the end of May.
Additional incentives can also add optimism to the market. The Senate is currently debating the $ 1.9 billion relief package adopted by the House on Saturday.
“Our macro team views the economy as spring, given the vaccinations and additional stimulus,” Keist Lerner, chief market strategist at Truist, wrote in a note to clients. “The consumer’s ability and desire to spend on services and experiences should lead to the best economic growth we’ve seen in over 35 years.”
Investors will look again on Thursday for the ongoing economic recovery when data on jobless claims for the week ending February 27 is released for the first time. Economists polled by Dow Jones forecast 750,000 first-time files.
In terms of earnings, BJ’s Wholesale and Kroger are among the names reported before the release, while Broadcom, Costco and Gap are on deck to keep up quarterly after the closing clock.
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