Nasdaq futures retreat as bond yields back up and energy prices surge

U.S. inventory futures on Tuesday pointed to a second-day of tech company-led declines, as traders react to the backup in bond yields and surging power costs.

What’s taking place
  • Futures on the Dow Jones Industrial Common

    fell 127 factors, or 0.4%, to 34616

  • Futures on the S&P 500

    fell 29 factors, or 0.7%, to 4,403

  • Futures on the Nasdaq 100

    dropped 1.2%, or 183 factors, to 15011

On Monday, the Dow Jones Industrial Common

rose 71 factors, or 0.21%, to 34869, whereas the S&P 500

declined 12 factors, or 0.28%, to 4443, and the tech-heavy Nasdaq Composite

dropped 78 factors, or 0.52%, to 14970.

What’s driving markets

Traders have been shunning authorities bonds since final week’s Federal Open Market Committee assembly, as merchants introduced ahead expectations for the primary charge hike into late 2022. Markets are additionally giving roughly 50% odds the European Central Financial institution will be part of the Fed with a charge hike subsequent 12 months.

The charges hypothesis helps the U.S. greenback acquire floor, because the greenback index

is now simply 1% beneath its 52-week intraday excessive.

Fed Chair Jerome Powell is talking on Tuesday in entrance of the Senate Banking Committee with Treasury Secretary Janet Yellen, on the federal government’s response to the coronavirus pandemic, and is due on Wednesday to talk at an ECB occasion.

“Powell must make some very robust arguments now to cease the present rise in yields,” mentioned Mark Grant, chief international strategist at B. Riley Monetary. “The ten 12 months Treasury

has now damaged by its technical resistance and issues might get problematical.”

Grant says traders must be promoting bonds, and utilizing yield-paying exchange-traded and closed-end funds as revenue substitutes.

Vitality markets are one other supply of concern, as Europe and Asia combat for natural-gas provides. The lead natural-gas contract

has surged 138% this 12 months. | Nasdaq futures retreat as bond yields again up and power costs surge


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