Dow futures fell more than 200 points as U.S. stocks slid on Wednesday, as a sharp rise in U.S. Treasury yields spooked investors who were considering whether recent data would change the direction of interest rates.
Futures for the Dow Jones Industrial Average (YM=F) and S&P 500 Index (ES=F) both ended lackluster trading down 0.6%, while Nasdaq 100 Index (NQ=F) contracts were down about 0.7%.
Stocks are selling off as investors fret over rising Treasury yields after the failed bond auction, reflecting worries that the Federal Reserve will keep interest rates high for a long time. Those concerns appear to outweigh hopes for AI growth, which rode the post-Nvidia (NVDA) earnings rally to lift the Nasdaq to a record high.
The 5-year Treasury yield approached a four-week high on Tuesday, while the 10-year Treasury yield (^TNX) surpassed the key 4.5% level. On Wednesday, the benchmark yields rose further, trading around 4.56%.
Investors are trying to figure out what a better-than-expected consumer confidence reading released on Tuesday means for the Fed’s policy decisions, but they are bracing for it to be a long wait before they cut rates after repeated warnings from officials.
read more: How does the labor market affect inflation?
The Fed’s Beige Book, due for release later on Wednesday, could provide more information ahead of Friday’s release of PCE, the central bank’s preferred inflation measure.
live1 update
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The economic outlook brightens…
Who doesn’t want some bright, positive macro data on a Wednesday? Not this guy, who’s always looking for some positive news.
I am truly prepared for that.
More than eight in 10 chief economists now expect the global economy to recover or stabilise this year, according to a new survey released today by the World Economic Forum (WEF) – nearly double the proportion in their January report.
The proportion of people who expect the global economic situation to worsen has fallen to 17% from 56% in January.
New research from the World Economic Forum suggests inflation may have room to cool further. (World Economic Forum)
