Futures drop as rate worries keep Treasury yields near recent peaks
By Ankika Biswas and Shashwat Chauhan
(Reuters) -U.S. stock index futures declined on Tuesday as investors continued to grapple with the prospects of a prolonged restrictive monetary policy by the Federal Reserve and its subsequent impact on the economy.
Adding to investor anxiety was the likelihood of a partial shutdown of the U.S. government by Sunday, which according to ratings agency Moody's (NYSE:MCO) is likely to be a «credit negative».
Megacap growth stocks including Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META) and Tesla (NASDAQ:TSLA) lost between 0.5% and 1.3% in premarket trading.
Amazon.com (NASDAQ:AMZN) shares also dipped 0.5% after boosting Wall Street on Monday on its plans to invest in the high-profile startup, Anthropic.
At 7:12 a.m. ET, Dow e-minis were down 157 points, or 0.46%, S&P 500 e-minis were down 23.75 points, or 0.54%, and Nasdaq 100 e-minis were down 92.25 points, or 0.62%.
All three major U.S. stock indexes are set to log quarterly declines for the first time this year heading into the last trading days of September.
Pressuring equities, the benchmark two- and 10-year Treasury yields have scaled multi-year highs after the Fed's hawkish longer-term rate outlook, a stance also projected by other major central banks.
«There is a growing sense of despondency that rates will not come down any time soon, and that they will remain in restrictive territory for an extended period, hampering growth and making for a more difficult economic environment for companies to operate in,» said Stuart Cole, chief macro economist at Equiti Capital.
Traders' bet on the benchmark rate remaining unchanged in November and December stood close to 80% and 59%, respectively, according to
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