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U.S. stock-index futures were pointing to losses on Friday, on the heels of two strong sessions, as bond yields continued to rise in the wake of the Federal Reserve’s policy statement on Wednesday.
How are stock-index futures trading?
-
Dow Jones Industrial Average futures
YM00,
-0.49%
fell 159 points, or 0.5%, to 34,485 -
S&P 500 futures
ES00,
-0.57%
declined 24.75 points, or 0.5%, to 4,414. -
Nasdaq-100 futures
NQ00,
-0.79%
dropped 113.50 points, or 0.7%, to 15,190.
On Thursday, the Dow Jones Industrial Average
DJIA,
rose 507 points, or 1.48%, to 34765, its biggest two-day point and percentage gain since Mar. 8, 2021, according to Dow Jones data. The S&P 500
SPX,
increased 53 points, or 1.21%, to 4449, and the Nasdaq Composite
COMP,
gained 155 points, or 1.04%, to 15052.
What’s driving the market?
Equity benchmarks have enjoyed two strong days of gains following the Federal Reserve’s policy meeting on Wednesday, as investors welcomed a delay to the start of the tapering of the central bank’s bond purchases and ignored the projected rise in interest rates in 2022.
“Something has clearly changed and positioning on rates is shifting. U.S. 10yr yields jumped to 1.44%, posting their biggest one-day gain since March, whilst 30 year bond yields jumped the most in a single day since March 2020,” said Neil Wilson, chief market analyst for Markets.com. Thursday also saw several global central banks meet, with interest rate hikes out of Norway and Turkey.
“Although the Fed and [Bank of England] remain fairly cautious and the dogma of transitory inflation persists, they’re starting to move beyond pandemic-era emergency mode. Investors see this and are moving too — rates steepening again as they did earlier this year,” said Wilson.
Major US. stock indexes were holding on to slim weekly gains, in a week that began with sharp losses linked to fears over global contagion from troubles surrounding property group China Evergrande.
As of Thursday, bondholders still hadn’t received any money from China Evergrande
3333,
which was due to make a $83.5 million interest payment on dollar bonds, The Wall Street Journal reported, citing sources.
The company has a 30-day grace period to make a payment, but barring that, Evergrande could trigger a default. Those shares fell 12% in Hong Kong on Friday. Elsewhere, media reports said Friday that the company’s electric-vehicle unit hadn’t paid suppliers in months, with employees also receiving no salary for September.
Elsewhere, Friday’s U.S. data calendar is light with August new home sales due at 10 a.m. Eastern. At the same time, Federal Reserve Chair Jerome Powell is due to give opening remarks at a “Fed Listens” event.
Cleveland Fed President Loretta Mester will speak to the Ohio Bankers League conference at 8:45 a.m.
Which companies are in focus?
-
Shares of Nike Inc.
NKE,
+1.36%
fell 4% in premarket trading after the sportswear maker reported quarterly sales that fell short of Wall Street expectations, and said wages and overhead expenses weighed on revenue. -
Costco Wholesale Corp.
COST,
+0.10%
shares rose modestly as the retailer topped $60 billion in net sales in a single quarter for the first time, hit $5 billion in annual profit and grew at its fastest pace in more than 20 years.
How are other assets trading?
-
The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.427%
rose 2 basis points to 1.428%. -
The ICE U.S. Dollar Index
DXY,
-0.13% ,
a measure of the currency against a basket of rivals, fell 0.3% to 93.15. -
Oil futures were steady, with the U.S. benchmark
CL00,
-0.10%
barely higher at $73.34 a barrel. Gold futures
GC00,
-0.18%
rose 0.2% to $1,754 an ounce. -
In Asia, Hong Kong’s Hang Seng Index
HSI,
-1.30%
dropped 1.3%, while China’s CSI 300 index
000300,
-0.08%
finished unchanged. The Nikkei 225 index
NIK,
+2.06%
jumped 2%. -
In Europe, the Stoxx Europe 600
SXXP,
-1.03%
was ready to break with three straight days of gains, down 0.6%, while the FTSE 100 index
UKX,
-0.43%
slipped 0.2%.
