S&P 500 futures edged lower Wednesday, as Wall Street’s struggles to start the second quarter of 2024 continued. Futures tied to the broad index slipped by 0.2%, while the Nasdaq 100 futures dipped 0.3%. Dow Jones Industrial Average futures fell by 49 points, or 0.1%. Intel shares slipped more than 5% in extended trading after reporting a $7 billion operating loss in its semiconductor manufacturing business. Tesla, a retail investor favorite, lost more than 1% following cuts to price targets from multiple investment firms. ADP data released Wednesday morning showed private payrolls grew more than expected in March. It offered another sign of resiliency in the economy and sent bond yields higher. Those moves build on Tuesday’s losing session, during which sticky inflation data and some strong manufacturing figures appeared to worry investors that the Federal Reserve will take longer to cut interest rates. The rate on the U.S. Treasury 10-year note touched its highest level since November on Tuesday, while oil prices surged to their most expensive price going back to October. Still, some market observers remain optimistic overall on equities, saying stocks are due for some consolidation after a strong start to the year. The first quarter, which concluded last week, was the best for the S&P 500 since 2019. “The narrative of falling inflation and imminent Fed rate cuts that drove the stock market’s first quarter gains is wobbling in the second quarter,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management. “The stock market is telling us that a lot has been priced-in over the past five months,” he added. “We could see choppy market action until the market processes inflation pressures, the Fed, oil prices and long-term interest rates — all of which could drive markets and add to near-term volatility.” Traders will monitor commentary expected from Federal Reserve Chair Jerome Powell, as well as from other central bank speakers including Fed Governors Michelle Bowman and Adriana Kugler. Chicago Fed President Austan Goolsbee and Michael Barr, the Fed vice chair for supervision, will also be speaking at events. The 10-year Treasury note yield rose on Wednesday, adding to big gains in the previous session as private payroll data surpassed forecasts. The benchmark rate added more than 3 basis points to 4.399%. The 10-year Treasury note briefly broke above 4.4% in intraday trade on Tuesday to notch its highest level since late November. The 2-year Treasury note yield ticked up by around 2 basis points, last sitting at 4.722%. Asia-Pacific stocks fell Wednesday, tracking declines on Wall Street overnight, with shares of electric vehicle makers dropping on demand worries. Hong Kong’s Hang Seng index was 1.3% lower after rising more than 2% in the previous session. Other EV makers also fell, with Nio and Li Auto down down 5.3% and 5.7%, respectively. Tesla’s first-quarter vehicle deliveries dropped 8.5% from a year earlier, sending shares of the U.S. EV maker down 5% overnight. China’s CSI 300 fell 0.36%, closing at 3,567.8 even as the country’s service sector activity expanded at its fastest pace since December. Taiwan was hit by a powerful earthquake early Wednesday. The Taiwan Weighted Index shed 0.63% to end at 20,337.6. Japan’s Nikkei 225 slid 0.97% to close at 39,451.85, with the broad-based Topix fell 0.29% to end at 2,706.51. South Korea’s Kospi also dropped 1.68% to end at 2,706.97, while the small-cap Kosdaq closed 1.30% lower at 879.96. In Australia, the S&P/ASX 200 fell 1.3% to 7,785.4, extending its declines from the previous session. Crude oil futures rose on Wednesday, adding to a recent streak of gains after an OPEC+ committee meeting ended without recommending changes to production policy. The West Texas Intermediate contract for May delivery gained 72 cents, or 0.85%, to $85.87 a barrel. The Brent contract for June delivery added 77 cents, or 0.87%, to $89.69. Gold prices extended a record run on Wednesday as concerns of rising inflation boosted demand for gold as a hedge, with bullion traders shrugging off doubts over an imminent U.S. interest rate cut and rising Treasury yields. Spot gold was up 0.3% at $2,286.24 per ounce, as of 0406 GMT, and hit a record high of $2,288.09 earlier in the session. Bullion has hit record highs consecutively since Thursday. U.S. gold futures gained 1.1% to $2,306.60.
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