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Stock market today: US futures sink as rising Treasury yields rattle nerves
Dow futures sank over 200 points as US stocks waded in the red on Wednesday, after a spike in Treasury yields unsettled investors already weighing whether recent data will shift the needle on interest rates.
Futures on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both fell 0.6%, coming off a lackluster session. Contracts on the Nasdaq 100 (NQ=F) dropped roughly 0.7%.
Stocks are selling off as investors contemplate a jump in US bond yields after a government debt auction flopped, reflecting worries that the Federal Reserve will keep rates higher for longer. Those concerns appeared to be eclipsing the hopes for AI growth that lifted the Nasdaq to a record in the slipstream of Nvidia’s (NVDA) post-earnings rally.
The yield on five-year Treasurys on Tuesday rose to near four-week highs, while the 10-year yield (^TNX) topped the key 4.5% level. On Wednesday, the benchmark yield inched up further to trade around 4.56%.
Investors are trying to puzzle out what Tuesday’s stronger-than-expected consumer confidence print means for Fed policy making, but they are braced for a long wait for a pivot to rate cuts after a litany of warnings from its officials.
Read more: How does the labor market affect inflation?
The release of the Fed’s Beige Book later Wednesday could shed more light ahead of Friday’s reading on PCE, the central bank’s preferred inflation gauge.
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