Futures point to fresh losses on Wall Street as yields rise
(Reuters) — U.S. stock index futures slipped on Wednesday, pointing to fresh losses on the second trading day of 2024, as Treasury yields extended gains ahead of data that could offer insights on the Federal Reserve's monetary policy easing plans.
Wall Street kicked off 2024 on a downbeat note, halting a blistering rally in stock markets last year, as Apple (NASDAQ:AAPL) and other technology names came under pressure from higher yields.
Shares of rate-sensitive megacap stocks including Nvidia (NASDAQ:NVDA), Apple and Tesla (NASDAQ:TSLA) fell marginally in premarket trading on Wednesday, as the 10-year Treasury yield climbed for a fourth session to 3.973%. [US/]
The declines came on the heels of a strong year for U.S. stocks. The benchmark S&P 500 came within a striking distance of its all-time closing high last week as investors priced in aggressive rate cuts in 2024 following signs of cooling inflation.
The minutes of Fed's December meeting, where policymakers opened the door to potential rate cuts this year, is scheduled for release at 2:00 p.m. ET.
«With many Fed members emerging to reign in expectations following that meeting, there is a good chance that we see a somewhat less expansive view than that expressed by Jay Powell,» noted Joshua Mahony, chief market analyst at Scope Markets.
«After all, the dot plot expectations signal a likely three rate cuts this year, bringing risk for equities given the current market pricing for six.»
While the Fed is widely expected to keep rates on hold in January, traders have priced in a 67% chance of a 25 basis point rate cut in March, as per CMEGroup's Fedwatch tool.
At 5:42 a.m. ET, Dow e-minis were down 66 points, or 0.17%, S&P 500 e-minis were down 8.75 points, or 0.18%,
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