Stocks recovered from early weakness to end the previous session roughly flat but may move back to the downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.2 percent.
The downward momentum on Wall Street comes amid a continued increase by treasury yields, which have moved sharply higher over the past few sessions.
The ten-year yield has risen to its highest level in almost three months amid worries the Federal Reserve will lower interest rates slower than previously anticipated.
After the Fed slashed interest rates by 50 basis points last month, CME Group’s FedWatch Tool is currently indicating a 91.0 percent chance of just a 25 basis point rate cut next month.
A steep drop by shares of McDonald’s (MCD) is likely to weigh on the Dow, with the fast food giant plunging by 6.8 percent in pre-market trading.
McDonald’s is under pressure after the Center for Disease control said a severe E. coli outbreak in Mountain West states has been linked to the chain’s Quarter Pounders.
Coffee giant Starbucks (SBUX) is also seeing significant pre-market weakness after reporting a decrease in fiscal fourth quarter sales and suspending its guidance for fiscal year 2025.
Meanwhile, shares of AT&T (T) are likely to see initial strength after the telecom giant reported better than expected third quarter earnings.
Shortly after the start of trading, the National Association of Realtors is due to release its report on existing home sales in the month of September. Existing home sales are expected to rise to an annual rate of 3.90 million in September from a rate of 3.86 million in August.
The Federal Reserve is scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, later this afternoon.
After coming under pressure early in the session, stocks regained ground over the course of the trading day on Tuesday. The major averages climbed well off their worst levels of the day before ending the day little changed.
The major averages moved to the downside going into the close, finishing narrowly mixed. While the Nasdaq rose 33.12 points or 0.2 percent to 18,573.13, the Dow edged down 6.71 points or less than a tenth of a percent to 42,924.89 and the S&P 500 slipped 2.78 points or 0.1 percent to 5,851.20.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Wednesday. Japan’s Nikkei 225 Index slid by 0.8 percent, while Hong Kong’s Hang Seng Index jumped by 1.3 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index is down by 0.6 percent, the U.K.’s FTSE 100 Index is down by 0.5 percent and the German DAX Index is down by 0.2 percent.
In commodities trading, crude oil futures are slumping $1.20 to $70.54 a barrel after jumping $1.70 to $71.74 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,757.90, down $1.90 compared to the previous session’s close of $2,759.80. On Tuesday, gold climbed $20.90.
On the currency front, the U.S. dollar is trading at 153.09 yen compared to the 151.08 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0768 compared to yesterday’s $1.0799.
Business News
Rising Treasury Yields May Weigh On Wall Street
2024-10-23 12:51:02
