July 3, 2022

News of the Trade

Latest trading, investing, and financial news

U.S. stock futures advance as bond yields recede

U.S. stock index futures on Thursday pointed to a higher start, with the hard-hit technology sector seeing some relief from the recent downturn in bond yields.

What’s happening
  • Futures on the Dow Jones Industrial Average
    YM00
    rose 129 points, or 0.4%, to 30449

  • Futures on the S&P 500
    ES00
    gained 13.75 points, or 0.4%, to 3776.50

  • Futures on the Nasdaq 100
    NQ00
    increased 59 points, or 0.5%, to 11624.

On Wednesday, the Dow Jones Industrial Average
DJIA
fell 47 points, or 0.15%, to 30483, the S&P 500
SPX
declined 5 points, or 0.13%, to 3760, and the Nasdaq Composite
COMP
dropped 16 points, or 0.15%, to 11053.

What’s driving markets

The focus of investors is whether the U.S. economy is headed for a recession. Federal Reserve Chair Jerome Powell on Wednesday testified a recession was a possibility even as he stuck to his message that the economy is strong enough to withstand a series of interest-rate hikes.

“The ‘unconditional’ notion that the Fed would be prepared to tolerate a recession if that is ultimately required to tame inflation has not been repudiated,” said Krishna Guha, vice chairman of Evercore ISI.

“But the fact that this was kept in the background not the foreground [on Wednesday] both avoids opening the Fed up to political attack from the left, and confirms that Powell does not want to do anything that might prematurely foreclose on the possibility of a softish landing, even at the cost of leaving the Fed short of Volcker-esque maximum forcefulness on inflation at this time.”

Powell will be quizzed on Thursday by lawmakers with the House Financial Services Committee starting at 10 a.m. Eastern Time.

The recent talk of recession has brought the yield on the 10-year Treasury
BX:TMUBMUSD10Y
down to 3.09% from as high as 3.48% earlier this month. Falling yields can help long-duration assets such as technology stocks and bitcoin
BTCUSD,
which rose in early action on Thursday.

New filings for unemployment benefits declined by 2,000 last week to 229,000 while remaining near a five-month high. It’s the latest sign that the U.S.’s red-hot labor market is finally starting to cool.

Single-stock movers
  • Revlon
    REV
    shares retreated Thursday following a torrid rally that was reminiscent of the “meme stock” craze from early 2021, as the company’s heavily shorted shares have surged more than 300% since the firm filed for bankruptcy protection.

  • Altria Group
    MO
    continued to slide as the FDA prepares to order Juul e-cigarettes to be banned in the U.S. market.

  • Freeport-McMoRan
    FCX,
    Conocophilips
    COP
    and Marathon Oil
    MRO
    all ranked among the top U.S. market decliners as oil prices continued to tumble.