Stock futures turned down on Tuesday as traders kept an eye on rising Treasury yields, which hit a 16-year high. Dow Jones Industrial Average futures declined 167 points, or 0.5%. Futures tied to the S&P 500 dropped 0.7%, while Nasdaq 100 futures fell 0.8%. Investors have been fretting recently over the potential of higher interest Federal Reserve for longer, fearing that tighter monetary policy could tip the economy into a recession. This has pushed Treasury yields to levels not seen in more than a decade. “Stocks are attempting to rebound but bulls remain chastened and diffident, with little appetite to chase on the upside,” wrote Adam Crisafulli of Vital Knowledge. “At this point, buyers seem willing to miss the next ~2-4% of an advance to ensure the lift is on more stable footing before participating.” Wall Street is coming off a mixed session, after lawmakers in Washington arrived at a short-term agreement over the weekend that headed off a government shutdown. The 30-stock Dow closed lower by 0.2%, while the S&P 500 closed marginally higher. The Nasdaq Composite rose for a fourth day in a row. Investors are hoping to turn the page on a disappointing September for stocks. All three major indexes closed the month and the third quarter lower. The S&P 500 alone lost nearly 5% in September. That means key economic reports — such as last month’s payroll reports, due Friday — and the kick off of earnings reporting season next week are back in focus. “Investors expect a solid upcoming earnings season, but we believe expectations are too optimistic for the balance of 2023 and 2024,” said Richard Saperstein, chief investment officer at Treasury Partners. “The most immediate risk to stocks is if companies are meaningfully affected by the economic slowing that is occurring from higher interest rates, which is a prominent risk that the market is ignoring right now,” he added. On the economic data front, investors will be watching the Job Openings and Labor Turnover Survey for August, due Tuesday morning. Economists polled by Dow Jones anticipate 8.8 million job openings. The 10-year Treasury yield, which serves as a benchmark for mortgage rates and as an investor confidence barometer, on Tuesday surged to its highest level since 2007. As of 8 a.m., the note rose more than 64 basis points to hit 4.727% as investors considered the state of the economy and awaited key data from the labor market that could inform Federal Reserve monetary policy. That was the highest level since Aug. 15, 2007, when it reached 4.745%. The 2-year Treasury yield, which is sensitive to expectations around where the Federal Reserve will set its own key borrowing rate, edged higher to 5.115%. Hong Kong stocks led Asia-Pacific markets lower on Tuesday, in their return from a National Day holiday on Monday. The city’s benchmark Hang Seng index closed 2.69% lower at 17,331.22, recovering slightly from earlier in the session when it was down more than 3%. In Australia, the S&P/ASX 200 traded down 1.28% to close at 6,943.4 after the central bank held rates at 4.10%, as expected by a Reuters poll. In Japan, the Nikkei 225 dropped 1.64% to close 31,237.94. South Korean and Chinese markets are closed for holidays. Oil prices lowered on Tuesday, after falling to a three-week low in the previous session, on a stronger U.S. dollar, a darkening global macroeconomic outlook and mixed supply signals. Brent futures lost 61 cents to $90.10 a barrel, while U.S. West Texas Intermediate crude (WTI), edged 50 cents lower to $88.32 per barrel. Earlier in the session, prices fell by more than 1%. Gold extended losses on Tuesday, hitting a seven-month low as expectations around the Federal Reserve keeping interest rates high boosted the dollar and bond yields, while focus turned to U.S. job openings data due later in the day. Spot gold was down 0.1% at $1,825.50 per ounce, dropping to its lowest since March 9. Bullion was down for a seventh consecutive session. U.S. gold futures shed 0.3% to $1,841.80.
Roodeweg 222, Willemstad, Curaçao