Stock futures fall as bond yields rise

US stock futures slipped, led by losses in technology stocks, as investors shunned government bonds and stocks alike on fears of higher interest rates and China’s Covid-19 policies that will weigh on growth.

S&P 500 futures fell 1.4%, sending major indexes higher for another day of losses after the opening bell in New York. Contracts related to the technology-focused Nasdaq 100 Index fell 1.8% while contracts for the Dow Jones Industrial Average fell 1.1%.

Investors largely withdrew from both stocks and bonds after the Fed Agree to a half percentage point increase At the benchmark lending rate last week. The move, part of the central bank’s efforts to contain high inflation, has left money managers uncertain how tight the Federal Reserve will be in its quest to control rates.

This financial tightening has heightened fears of a slowdown in global growth. China Executing closures And other measures to contain the spread of Covid-19 and Russia’s war against Ukraine Reinforced fears of supply chain disruptions and consumer spending cuts.

said Sebastian Galle, macro strategist at Nordea Asset Management. “There are a lot of negatives going on in the market.”

US government bonds were sold off again, pushing the yield on the benchmark 10-year Treasury to 3.139% on Monday from 3.124% on Friday. This puts it on track to settle at a new multi-year high. The 10-year yield rose 1.6 percentage points from the end of 2021 through Friday, prompting some investors to reassess valuations of technology and growth stocks. Bond yields rise when prices fall.

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The Cboe Volatility Index – Wall Street’s so-called fear gauge, also known as VIX – rose to 33.60, on course to reach its highest closing level since March 8.

“Market volatility shows that there is significant uncertainty about which direction people think we are headed,” said Peter Andersen, founder of Boston-based investment firm Andersen Capital Management.

The prospect of raising interest rates to combat inflation has some investors worried that such measures will slow economic growth.

These concerns have led some money managers to hold the dollar, which is seen as a safer investment in times of volatility, given its status as the world’s reserve currency. The WSJ Dollar Index, which measures the greenback against a basket of 16 other baskets, rose 0.1% on Monday.

In commodities, Brent crude futures fell 2.2% to $109.96 a barrel. High oil prices since the start of Russia’s war against Ukraine have begun to moderate as traders fear that the shutdown to contain the spread of Covid-19 in China will sap global demand.

Bitcoin fell over the weekend and traded at $33,010.55 on Monday, 8.5% down from the 5 p.m. ET level on Friday. The popular cryptocurrency has lost more than a quarter of its value in the year-to-date period.

Cryptocurrency stocks fell in pre-market trading on Monday, along with bitcoin. Cryptocurrency exchange

Coinbase Global

Bitcoin miner shares plunge 5.9%

Digital Holdings Marathon

Shares are down 6%.

shares

Tyson Foods

The pre-market rose 2.6% after it reported quarterly earnings and revenue that beat analyst expectations.

Abroad, the Stoxx Europe 600 continental index fell 1.7%, led by declines in the travel, leisure and technology sectors.

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In Asia, Japan’s Nikkei 225 is down 2.5% on Monday, while Australia’s S&P/ASX 200 is down 1.2%.

A woman passed an electronic screen in Tokyo on Monday.


picture:

Eugene Hoshiko/The Associated Press

China’s CSI 300 Index, which tracks the largest companies listed in Shanghai or Shenzhen, fell 0.8%. Hong Kong markets are closed for a public holiday.

Write to Caitlin Ostroff at [email protected] and Serena Ng at [email protected]

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