Treasury yields, Foxconn, tech earnings - what's moving markets
Investing.com — Rising U.S. Treasury yields continue to weigh on stock markets at the start of a week that includes the release of earnings from a number of tech giants. Crude slips back as aid enters Gaza, while Apple is under pressure as its main supplier, Foxconn, faces a tax probe in China.
U.S. bond yields are on the rise again, with the yield on the benchmark 10-year Treasury back up to 4.969% on Monday, just short of the widely-watched 5% threshold, having surged almost 30 basis points last week alone.
Yields on the benchmark 10-year Treasury rose briefly to 5% late last week, a level not seen since 2007.
The recent surge in long-term bond yields suggests the market has embraced the idea that rates will remain higher for longer, with a new normal for rates seemingly above the Federal Reserve's pick of 2.5%.
Fed Chair Jerome Powell on Thursday said the stronger-than-expected U.S. economy might warrant tighter policy though rising market interest rates could make action by the central bank itself less necessary.
There will be a fresh update on the strength of the U.S. economy this week from data including third-quarter growth as well as the Fed’s favored measure of inflation, the core personal consumer expenditures price index.
Another factor pushing yields higher has been the predicted scale of U.S. borrowing, with Washington last week reporting a $1.695 trillion budget deficit for fiscal 2023, fully 23% higher than the prior year and above all pre-pandemic shortfalls.
U.S. stock futures edged lower Monday, starting the new week on a negative note, with rising bond yields and wariness ahead of major tech earnings weighing.
At 05:45 ET (09:45 GMT), the Dow futures contract dropped 60 points or 0.2%, S&P 500 futures
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