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Bond yields reached a two-year high as the stock futures fell

The futures of US stocks plummeted and bond yields reached two-year highs, intensifying investor fears that rising interest rates would push back large technology stocks that dominated the markets.

The futures for the S&P 500 fell 1% on Tuesday U.S. markets closed Monday For a public holiday. Contracts for technology-focused Nasdaq-100 fell 1.6%, while the future of the Dow Jones Industrial Average fell 0.7%.

Business day

EST at all times

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Technology stocks came under pressure in January as yields on government securities soared. On Tuesday, the benchmark 10-year Treasury yield on Friday was 1.771% to 1.822% – its two-year high. Yields rise when prices fall.

Shares of electric-vehicle maker Tesla fell 2.5% in pre-market trading.

Twitter,

Meta platforms

-Formerly known as Facebook-and

Amazon.com

Each fell about 2%.

Investors expect a Tight labor market And rising inflation will push the Federal Reserve to make multiple rate hikes this year. Yields on two-year bonds rose to 1.034% — the highest level since February 2020 — from 0.965% on Friday, signaling expectations for higher rates. Higher yields will reduce the attractiveness of future returns promised by many technology stocks.

Interest-Rated Futures Markets indicate investors are betting on four to five interest rate hikes this year, from three to four Fridays

CME Team.

“Markets are still trying to quantify the rate hike. The market only expected a rate hike for 2022 in October, and now expects it to be four,” said Edward Park, chief investment officer at Brooks McDonald’s, a UK investment firm. Reflects uncertainty. “

The Cboe Voltage Index, also known as the Wall Street Fear Cage, also known as the VIX, rose to -21.78, a one-month high.

Investors expect the Federal Reserve to make several rate hikes this year.


Photo:

Timothy A. clary / Agence France-Presse / Getty Images

Many financial institutions plan to record earnings before the market opens, especially Goldman Sachs, Plus Mellon Bank of New York, PNC Financial Services And Charles Swap. Profits are starting to come In some large banks f The turbulent epidemic benefited the economy.

Oil prices soared as geopolitical tensions in the Middle East added to concerns about tight distribution. The futures for the West Texas Intermediate, a major brand of U.S. crude oil, rose 1.9% to $ 85.39 a barrel. If the contracts are above $ 84.65 per barrel, it will indicate their maximum closing level after October 2014. Yemen’s pro – Iranian Houthi rebels say they are behind. Airstrikes in the United Arab Emirates On Monday, intense fighting spread across the region.

Overseas, the Pan-Continental Stoxx Europe 600 fell 1.1%, with huge losses in the technology and travel and leisure sectors. Shares

GAM Holding

The Swiss asset management company fell 8% after claiming a net loss of 2021 equivalent to about $ 33 million.

Although China’s Shanghai joint stock gained 0.8%, key Asian indices fell sharply. South Korea’s Kospi fell 0.9%, Japan’s Nikkei 225 0.3% and Hong Kong’s Hong Cheng 0.4%.

Last year saw the largest appreciation of the US dollar since 2015. This is good for many US consumers, but it could also have an impact on stocks and the US economy. Diane Roboin of the WSJ explains. Photo Description: Sebastian Vega / WSJ

Write to Caitlin Ostroff at Caitlin.ostroff@wsj.com

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