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After a lackluster performance in February, Wall Street indexes kicked off March on a volatile note as fresh evidence of persistent price pressures and comments from Federal Reserve policymakers fueled worries about the U.S. central bank staying hawkish for longer.
The yield on 10-year Treasury notes – the benchmark for global borrowing costs – raced further above the 4% level on Thursday to touch a fresh four-month high of 4.014%.
Meanwhile, the 2-year yield eased slightly from 15-year highs hit earlier in the session. [US/]
“Market today is really similar to the market over the last few weeks, with stocks taking their cue from the bond market, particularly the 10-year Treasury yield, as it tends to put pressure on the market multiple,” said Jack Albin, chief investment officer at Cresset Capital.
“Investors are just reassessing the Fed’s tightening program.”
A Labor Department report at 8:30 a.m. ET is expected to show initial jobless claims rose to 195,000 in the week ended Feb. 25, after it climbed to 192,000 in the previous week.
The benchmark S&P 500 and the tech-heavy Nasdaq fell on Wednesday after data showed U.S. manufacturing contracted for a fourth straight month in February, although raw material prices increased last month.
Traders of futures tied to the Fed’s policy rate saw about an even chance that the rate will get to a range of 5.5%-5.75% by September, from the current range of 4.5% to 4.75%.
U.S. monthly payrolls and consumer prices data in the coming days will offer investors more clues on the path of rates heading into the Fed’s March 21-22 meeting, where it is currently expected to raise rates by 25 basis points.
At 7:19 a.m. ET, Dow e-minis were up 89 points, or 0.27%, S&P 500 e-minis were down 11 points, or 0.28%, and Nasdaq 100 e-minis were down 50.25 points, or 0.42%.
Tesla Inc fell 6.1% in premarket trading after Chief Executive Elon Musk and team’s four-hour presentation failed to impress investors with few details on its plan to unveil an affordable electric vehicle.
Salesforce (NYSE:CRM) Inc soared 15.7% after the cloud-based software firm forecast first-quarter revenue above analysts’ estimates and doubled its share buyback to $20 billion. Meanwhile, Reuters reported that activist investor Elliott Management has nominated candidates to Salesforce’s board.
Macy’s Inc (NYSE:M) jumped 8.2% after the department store operator forecast full-year profit above Wall Street estimates.
Silvergate Capital (NYSE:SI) slumped 35.3% after the cryptocurrency-focused lender delayed its annual report and said it was evaluating its ability to operate as a going concern.
