Stock futures pointed to a lower start Monday as major benchmarks begin the final week of September on track for a losing month as investors fret over rising bond yields and indications the Federal Reserve plans to hold interest rates at high levels for an extended stretch.
What’s happening
-
Dow Jones Industrial Average futures
YM00,
-0.22%
fell 68 points, or 0.2%, to 34,164. -
S&P 500 futures
ES00,
-0.04%
were down 11 points, or 0.3%, at 4,350. -
Nasdaq-100 futures
NQ00,
+0.06%
fell 43 points, or 0.3%, to 14,826.50.
Last week, the S&P 500
SPX
fell 2.9%, its biggest weekly decline since the period ending March 10, as it finished at its lowest since June 9. The Dow
DJIA
finished Friday at its lowest since July 10, while the Nasdaq
COMP
saw its lowest close since June 7.
What’s driving markets
There weren’t too many catalysts for markets on Monday, though the tentative end of the writer’s strike lifted media companies like Warner Brothers Discover Inc.
WBD,
Paramount Global
PARA,
Walt Disney Co.
DIS,
and Netflix Inc.
NFLX,
in premarket trade.
President President Biden separately is planning to go to Michigan to support the United Auto Workers strike against the Big Three automobile makers.
The bigger story has been the rapid climb in long-term interest rates. Technical strategists at Bank of America said, while they don’t have evidence that the move higher in the 10-year yield is complete, it is getting stretched.
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
rose five basis points to 4.49%. Also stoking concerns about the outlook, oil prices have risen sharply since summer, with Brent crude
BRN00,
the global benchmark, and West Texas Intermediate crude
CL00,
the U.S. benchmark, both above $90 a barrel.
“Markets have struggled in recent weeks amid concerns over rising oil prices and bond yields, subdued economic activity across the global manufacturing sector and still-high inflation in major developed economies,” said Fawad Razaqzada, market analyst at Forex.com and City Index, in a note. “As a result, investors have lost appetite for taking on too much risk.”
Rather than rush in to buy the dip when stock prices decline, traders “have been happy to sit on the offer and slam asset prices back down each time we see a bit a of relief rally,” he wrote.
The housing crisis in China was back in the news, as Evergrande
3333,
shares slumped as it scrapped a $35 billion debt restructuring plan, while shares of China Aoyuan Group dived Monday in their first day of trading in more than a year. The Hang Seng
HK:HSI
skidded 1.8% in Hong Kong trade.
Companies in focus
-
Amazon.com Inc.
AMZN,
+1.37%
said Monday it would invest up to $4 billion in AI startup Anthropic and take a minority stake in the company in a move aimed at accelerating the development of its future foundation models and making them accessible to customers of its cloud business, AWS. Amazon shares rose 0.5%.
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