Traders work on the floor of the New York Stock Exchange.
NYSE
U.S. stock futures were near the flatline on Tuesday night, after the major averages fell for a third straight session as a global bond rout and higher oil prices weighed on investor sentiment.
Dow Jones Industrial Average futures rose by 3 points, or 0.01%. S&P 500 futures were flat, while Nasdaq 100 futures dipped 0.04%.
Wall Street is coming off a losing session. The Dow shed 116 points, or 0.2%, while the S&P 500 slid 0.7%. The Nasdaq Composite, which dropped 1.3%, the biggest laggard of the three.
Tech stocks, especially, dropped as bond yields in the U.S. and elsewhere scored fresh milestones. The 30-year Treasury yield notched a new 19-year high on Tuesday, while Japan’s 10-year bond yield reached its highest level in three decades. German 30-year bund yields hit their highest point since 2011, while rates on France’s 30-year bond reached its highest going back to 2008.
Despite long-term bond yields reaching multi-decade highs, however, the stock market reaction was remarkably muted. Investors bet that continued economic growth, in tandem with historically strong earnings for companies, will continue to support the stock market in the face of higher yields.
“I think, ultimately, the economy is strong enough,” Adam Parker, founder and CEO at Trivariate Research, told CNBC’s “Closing Bell” on Tuesday. “I think the earnings and cash flows from these big companies are strong enough that they’ll power through any kind of scare that happens around this.”
The latest Federal Open Market Committee meeting minutes are set to release Wednesday afternoon. Investors will likely take a keen eye to the minutes, given the sharp divisions within the central bank. At the July meeting, there were three dissenters voting to hike rates, a division that investors will seek greater detail on.
A week heavy on retail earnings continues as well, with Target, TJX and Lowe’s reporting Wednesday before the open. Analog Devices also reports.
About The Author
