Wall St eyes lower open on jitters over higher-for-longer rates
By Amruta Khandekar and Shristi Achar A
(Reuters) -Wall Street was set to open lower on Friday after a three-day selloff, with megacap growth stocks among lead decliners, as evidence of a resilient U.S. economy fanned fears of interest rates staying higher for longer.
The three main U.S. stock indexes have shed over 2% each this week after a spate of strong economic data, including a fall in weekly jobless claims, caused investors to dial back expectations of rate cuts and drove up government bond yields.
The yield on the 10-year Treasury note hit a ten-month high of 4.328% in the previous session and came within a whisker of its highest level since 2007. [US/]
«The drivers really have been of late the rising Treasury yields and that is signaling a more risk-off investor sentiment,» said Art Hogan, chief market strategist at B Riley Wealth.
«Investors are looking at (better-than-expected economic data) and saying the Fed likely isn't restrictive enough yet.»
Traders see a nearly 91% chance of the Fed holding rates at current levels at its September meeting, according to the CME Group's (NASDAQ:CME) Fedwatch tool.
On Friday, rate-sensitive big technology and growth stocks such as Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN) and Tesla (NASDAQ:TSLA) slipped between 1% and 2.6% in premarket trade even as Treasury yields took a breather.
The tech-heavy Nasdaq had closed at a two-month low in the previous session.
Risk sentiment has also been hurt in recent days by China's sluggish economic recovery and growing concerns about its property market. U.S.-listed shares of Chinese companies JD (NASDAQ:JD).Com and Alibaba (NYSE:BABA) Group fell 4.7% and 3.3% respectively.
Among major movers of the day, Applied Materials
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