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U.S. stock futures advance as Treasury yields fall further, while Microsoft and Alphabet earnings loom.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+0.50%
rose 12 points, or 0.3%, to 4254 -
Dow Jones Industrial Average futures
YM00,
+0.35%
added 46 points, or 0.1%, to 33113 -
Nasdaq 100 futures
NQ00,
+0.62%
climbed 64 points, or 0.4%, to 14776
On Monday, the Dow Jones Industrial Average
DJIA
fell 191 points, or 0.58%, to 32936, the S&P 500
SPX
declined 7 points, or 0.17%, to 4217, while the Nasdaq Composite
COMP
gained 35 points, or 0.27%, to 13018.
What’s driving markets
Hopes that a surge in benchmark borrowing costs now may have peaked continued to support stocks early Tuesday.
The 10-year Treasury yield
BX:TMUBMUSD10Y
fell 3.3 basis points to 4.817%, extending its decline after hitting a 16-year high above 5% at the start of the week.
The retreat in yields came after Bill Ackman, manager of hedge fund Pershing Square, said he had closed his bet against 30-year Treasury bonds because “there is too much risk in the world to remain short bonds at current long-term rates,” and because “the economy is slowing faster than recent data suggests.”
Former Pimco bond chief Bill Gross also juiced the bond market rally by saying he expected a U.S. recession to begin by the end of the year and he was making bets interest rates would fall to reflect that.
“As we hit 5% the famous and not so famous buyers seemed to come out of the woodwork,” said Jim Reid, strategist at Deutsche Bank.
Still, the recent run up in yields over recent weeks — on the back of strong economic data and concerns over oversupply of Treasuries — saw the S&P 500 close Monday with a 3.6% loss over the last five days, with technical analysts wary that the stock barometer has dropped below its 200-day moving average.
Reviving an equity rally may require not just further declines in yields but also additional support from the ongoing third quarter corporate earnings season analysts said.
“Overall, I suspect that a bottoming in both equities and Treasuries will be a process this week, and the fact that 1/3 of the S&P 500 reports earnings this week might help to aid in stabilization,” said Mark Newton, head of technical strategy at Fundstrat.
Coca-Cola
KO,
General Electric
GE,
3M
MMM,
and General Motors
GM,
are among those releasing results before the opening bell rings on Wall Street, with Microsoft
MSFT,
Alphabet
GOOGL,
Visa
V,
and Texas Instruments
TXN,
after the close.
U.S. economic updates set for release on Tuesday include the S&P flash services and manufacturing PMIs for October, due at 9:45 a.m. Eastern.
