Stock futures were flat Wednesday after the major averages added to weeks of losses amid a jump in bond yields in the previous session.
Futures tied to the Dow Jones Industrial Average traded just 7 points higher. S&P 500 futures edged slightly higher by 0.1%, and Nasdaq 100 futures advanced 0.2%.
Stocks added to their three-week slide Tuesday. The Dow fell about 173 points, or 0.5%, and the S&P 500 slid 0.4%. The Nasdaq Composite dropped 0.7% to notch its first seven-day losing streak since 2016.
The moves came amid a surge in bond yields that saw the 10-year U.S. Treasury yield jump to its highest level since June. The rate on the 30-year Treasury closed at its highest level since 2014. Bond yields move inversely to prices. Rates dipped slightly Wednesday, with the 10-year trading at 3.321%. The 2-year and 30-year yields traded at 3.47% and 3.472%, respectively.
Investors are split on how to approach the market entering the first post-Labor Day week in September, a notoriously cruel month for stocks. All eyes are on the 3,900 level on the S&P 500. Some see the index falling to even lower lows, while others are optimistic about a year-end rally.
“It is the battleground,” NewEdge Wealth’s chief investment officer Cameron Dawson, said on CNBC’s “Closing Bell: Overtime.” “It was resistance and support, and anytime you have these places where you have a lot of consolidation of resistance and support, we’re going to see a lot of fighting to see where we push either above or below it.”
“If we hold 3,900, that is a bullish signal,” she added. “That means the market is sniffing out some change in liquidity, willing to put a higher multiple on things on a sustainable basis… If we don’t, then that 3,600 is in play in short order.”
On Wednesday, the Federal Reserve will give its summary on current economic conditions, also known as the Beige Book. Elsewhere, Fed presidents Loretta Mester of Cleveland and Tom Barkin of Richmond, as well as Fed Vice Chair Lael Brainard are scheduled to speak at various events.
Bitcoin falls to lowest level since June
Bitcoin prices traded below $19,000 on Wednesday to reach their lowest levels since June as traders grapple with declines in the stock market and a strengthening dollar.
As of 5:51 a.m. ET, the digital currency traded at $18,800.60.
“The macro environment also continues to prove difficult with the dollar continuing to put in highs. This impacts all risk assets as we can see,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC.
— Arjun Kharpal
Barkin says he has bias ‘towards moving more quickly’: FT
Richmond Fed President Thomas Barkin said in an interview with the Financial Times he has a bias toward “moving more quickly” rather than slowly.
“I have a bias in general towards moving more quickly, rather than more slowly, as long as you don’t inadvertently break something along the way,” he told the newspaper, adding policymakers are likely to continue hiking rates until they are “convinced” that inflation is under control.
“The destination is real rates in positive territory and my intent would be to maintain them there until such time as we really are convinced that we put inflation to bed,” he said to the FT.
The probability of a 75-basis-point hike at September’s FOMC meeting rose to 74.0% as of early Wednesday morning U.S. time, according to the CME Group’s FedWatch tool. The chance for a 50-basis-point hike now stands at 26%, FedWatch showed.
Newell Brands rises more than 3% after hours
The parent company of brands such as Yankee Candle and Rubbermaid saw its shares fall 3.8% in extended trading, after revising its third-quarter revenue guidance, forecasting less than what it had previously expected.
The company CEO said Newell has experienced “a significantly greater than expected pullback in retailer orders and continued inflationary pressures on the consumer.”
Newell fell 2.5% in the previous session. The stock is down about 21% this year.
— Tanaya Macheel
A year-end upside surprise is overdue, says Leuthold’s Paulsen
When stocks rallied off their summer lows, many investors were skeptical about how long it could really last. Traders can’t rule out the possibility that the bounce was a temporary trap, but nevertheless, there’s a lot to be encouraged by in the market, he said in a note late Tuesday.
“As quick and nasty as this latest S&P 500 plunge has been, its ‘undertones’ seem much healthier,” he said. “Whereas stock losses in the first half destroyed the returns of the most aggressive investments, this downturn seems abnormally concentrated among large-company growth stocks, if not simply large-cap tech stocks.”
“In our view, it is heartening to see small caps, cyclicals, high-beta, and low-quality perform so well in such a sharp market drop,” he added. “Unlike the first half of 2022, the undertones of the market downswing suggest the possibility of a much more favorable outcome than many now fear.”
— Tanaya Macheel
Stock futures open little changed
U.S. equities futures opened little changed on Tuesday night after the major averages added to weeks of losses earlier in the session.
Futures tied to the Dow Jones Industrial Average dipped 21 points. S&P 500 futures fell slightly by 0.08% and Nasdaq 100 futures lost 0.05%.
— Tanaya Macheel