U.S. stock index futures slid during trading overnight on Wednesday, accelerating losses from the regular trading session, which ended with the main averages in red.
Futures contracts tied to the Dow Jones Industrial Average fell 62 points. Futures S&P 500 and Nasdaq 100 fell 0.3% and 0.5%, respectively.
Shares posted heavy losses during regular operations as rising bond yields scared investors. The S&P 500 fell 1.3%, while the Dow Jones Industrial Average closed 119 points, or 0.38%, lower. The Nasdaq Composite was the relatively low-performing, with a 2.7% drop as tech names declined. The index is on track to post its third consecutive negative week, the longest weekly loss streak since September.
The weakness occurred as the 10-year Treasury yield widened gains. The benchmark rate rose to 1.49% on Wednesday before falling slightly. Last week, performance rose to a high of 1.6% in a play that some described as a “rapid” rise.
“Our current strategic work suggests strong economic growth this year with a modest rise in inflation,” said Scott Wren, senior chief equity strategist at the Wells Fargo Investment Institute. “In trying to read tea leaves, our intensification of the yield curve, in our view, reflects the market belief that growth and inflation should continue to decline to appropriate levels as the pandemic eases. We consider this to be positive for stocks and other risky assets, such as commodities, ”he added.
During Wednesday’s session, a highlight was the companies linked to the reopening of the economy. Actions by airline and cruise operators advanced after President Joe Biden said Tuesday that the United States will have enough Covid-19 vaccines for all adults by the end of May.
Additional stimulus measures could also inject optimism into the market. The Senate is currently debating the $ 1.9 trillion aid package approved by the House on Saturday.
“Our macro team sees the economy as a spring laden with vaccines and additional incentives,” wrote Keith Lerner, Truist market strategist in a note to clients. “The ability and desire of the consumer to spend on services and experiences should lead to the best economic growth we have seen in over 35 years.”
On Thursday, investors will review the ongoing economic recovery when the first data on unemployment claims for the week ending Feb. 27 are released. Economists surveyed by Dow Jones predict 750,000 users presenting for the first time.
In terms of earnings, BJ’s Wholesale and Kroger are among the names that reported before the opening, while Broadcom, Costco and Gap are on deck to provide quarterly updates after the closing bell.
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