Before the bell on Friday, US stocks decreased, as the retreat occurred after benchmark Treasury yields surged to 5% following remarks by Federal Reserve Chairman Jerome Powell.Thank you for reading this post, don't forget to subscribe!
The Dow Jones Industrial Average (^DJI) was down roughly 0.2%, while S&P 500 (^GSPC) futures dropped approximately 0.3%, both on track for a week of decline after Thursday’s selloff. Contracts on the technology-heavy Nasdaq 100 (^NDX) fell around 0.4%.
Stocks declined after Powell indicated that the Fed remains committed to its “higher for longer” rates stance, causing Treasury yields to rise. The benchmark 10-year yield (^TNX) briefly reached 5% late Thursday, a level not observed since July 2007.
“The fundamental message is ‘don’t anticipate a rescue from the Fed anytime soon,'” stated Greg Whiteley, portfolio manager at DoubleLine, to Reuters. “That permits individuals to charge rates above 5%.”
On Friday, the 10-year yield retreated from that significant level to approximately 4.93% as part of a broader correction in fixed income assets.
Despite strong financial reports, investors hoping for an improvement in the bearish sentiment have yet to find relief. On Thursday, reports were released by American Express (AXP), Comerica (CMA), and Huntington Bancshares (HBAN).
There is a risk that the Israel-Hamas conflict could escalate into a wider Middle East crisis on still-volatile markets, following hints from Israel’s defense chief about a potential ground attack on Gaza over the weekend.
Decreased stock futures due to lower bond sales
US futures began Friday with a decline as the 10-year Treasury yield pulled back from a sharp rise that brought it to 5%.
Futures on the Dow Jones Industrial Average (^DJI) dropped 0.21%, or 71 points, while S&P 500 (^GSPC) futures fell 0.30%. Contracts on the technology-heavy Nasdaq 100 (^NDX) decreased by 0.39%.
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