December 8, 2022

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Dow futures fell more than 150 points as Treasury yields rose

Dow futures fell more than 150 points as Treasury yields rose

US stock futures tumbled Thursday, with the massive rally at the start of the month paring back, as interest rates rose again.

Dow Jones Industrial Average futures were down 152 points, or 0.5%. S&P 500 futures are down 0.5%, and Nasdaq 100 futures are down 0.5%.

The benchmark 10-year rate rose by more than one basis point to 3.773%. The two-year yield, which is more sensitive to monetary policy changes, rose two basis points to 4.14%.

Wall Street started the week on a high, with the S&P 500 index posting its biggest two-day rally since 2020. Stocks struggled to sustain the streak of gains on Wednesday but ultimately failed. The Dow closed down 42 points, or 0.14%. The S&P 500 and Nasdaq Composite were down 0.20% and 0.25%, respectively.

“Few people are convinced that the latest move is more than the rise of a bear market, with skepticism about durability,” said Mark Hackett, head of investment research at Nationwide. “Confidence remains weak, starting with CEOs, small businesses, consumers and investors. Global pessimism is optimistic from a conflicting perspective, although it is difficult to predict the timing of the pendulum swing.”

Investors continue to monitor economic data to see if inflation has abated, or if an interest rate hike by the Federal Reserve is pushing the US into recession.

Data from the ADP showed that the labor market remained strong among private companies in September, when companies added 208,000 jobs. This beats the 200,000 jobs estimate from Dow Jones. On Friday, the Bureau of Labor Statistics’ September jobs report will be released, giving the central bank and investors another piece of data.

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Some companies report their earnings as well. On Thursday, Constellation Brands will announce its results before the opening bell, and Levi Strauss will report after the market closes.