A fresh selloff in bonds sent U.S. stock futures lower on Tuesday after a three-day break, with the high-growth tech sector feeling the most heat.
What’s happening
-
Futures on the Dow Jones Industrial Average
YM00,
-0.71%
slumped 249 points, or 0.7%, to 35556 -
Futures on the S&P 500
ES00,
-1.12%
declined 51 points, or 1.1%, to 4604 -
Futures on the Nasdaq 100
NQ00,
-1.77%
dropped 275 points, or 1.8%, to 15322
Last week, the Dow Jones Industrial Average
DJIA,
S&P 500
SPX,
and Nasdaq Composite
COMP,
each lost ground, with the tech-heavy Nasdaq now down 5% for the year.
What’s driving markets
The big move in financial markets was in bonds, as the yield on the 10-year Treasury
TMUBMUSD10Y,
rose 4 basis points to 1.83%. Yields move in the opposite direction to prices.
Yields on the 2-year Treasury
TMUBMUSD02Y,
which are more sensitive to Fed policy expectations, shot up 9 basis points, rising above 1%.
“European and U.S. equity futures are flashing red amid a jump in Treasury yields, as investors brace for the Federal Reserve to raise interest rates four times this year to tame inflation,” said Lukman Otunuga, senior research analyst at FXTM.
The 200-day moving average in Nasdaq 100 sits around 14,979, noted Peter Garnry, head of equity strategy at Saxo Bank.
Crude-oil prices
CL.1,
rose on Middle East unrest, as Houthi rebels launched a drone attack on a key oil facility in Abu Dhabi. The United Arab Emirates is OPEC’s third-largest producer.
Earnings season ramps up this week with results from Bank of America
BAC,
and Goldman Sachs
GS,
expected ahead of the open.
