U.S. stock futures slide as Treasury yields hit new cycle peak
U.S. stock futures fell early Tuesday due to concerns over rising Treasury yields and the ongoing property sector crisis in China. On Monday, the Dow Jones Industrial Average rose by 43 points (0.13%), reaching 34007, while the S&P 500 increased by 17 points (0.4%) to 4337, and the Nasdaq Composite improved by 60 points (0.45%) to hit 13271.
The 10-year Treasury yield, an important benchmark, reached its highest level since 2007 at nearly 4.57% early Tuesday. This rise is driven by expectations of the Federal Reserve taking a more aggressive stance on interest rates. Some Fed officials have recently suggested the need for rate hikes and maintaining them at higher levels for a while.
JPMorgan Chase CEO Jamie Dimon warned that if inflation isn't controlled, the market might not be prepared for potential interest rate hikes to 7%. The increase in Treasury yields has posed challenges for riskier assets, especially long-duration stocks.
The U.S. dollar index reached its highest point in about ten months, surpassing 106. This is due to higher Treasury yields compared to other countries, which could potentially impact U.S. equities by reducing the competitiveness of multinational companies.
The crisis in China's property sector is also causing global market unease. Shares in China Evergrande plummeted after the company failed to make a debt payment, leading to the arrest of former executives. As a result, Hong Kong's Hang Seng index dropped by 1.4%, reaching its lowest point since November.
Some economic data releases for Tuesday include the S&P Case-Shiller home price index for July at 9 a.m. Eastern, August's new home sales, and September's consumer confidence figures at 10 a.m. Federal Reserve Governor Michelle Bowman is also scheduled to deliver a speech at 1:30 p.m.
The 10-year Treasury yield, an important benchmark, reached its highest level since 2007 at nearly 4.57% early Tuesday. This rise is driven by expectations of the Federal Reserve taking a more aggressive stance on interest rates. Some Fed officials have recently suggested the need for rate hikes and maintaining them at higher levels for a while.
JPMorgan Chase CEO Jamie Dimon warned that if inflation isn't controlled, the market might not be prepared for potential interest rate hikes to 7%. The increase in Treasury yields has posed challenges for riskier assets, especially long-duration stocks.
The U.S. dollar index reached its highest point in about ten months, surpassing 106. This is due to higher Treasury yields compared to other countries, which could potentially impact U.S. equities by reducing the competitiveness of multinational companies.
The crisis in China's property sector is also causing global market unease. Shares in China Evergrande plummeted after the company failed to make a debt payment, leading to the arrest of former executives. As a result, Hong Kong's Hang Seng index dropped by 1.4%, reaching its lowest point since November.
Some economic data releases for Tuesday include the S&P Case-Shiller home price index for July at 9 a.m. Eastern, August's new home sales, and September's consumer confidence figures at 10 a.m. Federal Reserve Governor Michelle Bowman is also scheduled to deliver a speech at 1:30 p.m.
Comment:
The market is moving in the right direction