Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 15, 2024.
Brendan McDermid | Reuters
Stock futures fell on Wednesday after the S&P 500 posted its first back-to-back loss since early September, while Treasury yields moved higher.
Futures linked to the broad market index lost 0.1%. Dow futures slid 154 points, or 0.4%, while Nasdaq-100 futures dropped 0.2%.
Dow member McDonald’s fell 6.1% after the U.S. Centers for Disease Control and Prevention said an E. coli outbreak tied to the fast-food giant’s Quarter Pounder burgers has resulted in 10 hospitalizations and one death. Starbucks tumbled 5% after the coffee chain issued preliminary quarterly results showing that its sales fell again.
Also weighing on futures was another uptick in rates. The benchmark 10-year Treasury note yield rose 3 basis points to 4.23%, reaching levels not seen since July.
Higher yields put pressure on the S&P 500 and Dow on Tuesday, with both indexes closing slightly lower on the day. The Nasdaq Composite, however, rose about 0.2%.
Robust economic data and deficit worries are among the factors behind the rise in the 10-year Treasury yield – despite a half-point rate cut from the Federal Reserve in September. Traders are also growing concerned that central bank policymakers may be less inclined to reduce rates, even as the Fed had forecasted another half-point worth of trimming before the year ends.
To be sure, the backdrop for equities is still constructive, according to Jeff deGraaf, head of technical research at Renaissance Macro Research.
“The trends are still positive and we don’t have a lot of near-term momentum, but that’s not the end of the world by any means,” he said Tuesday on CNBC’s “Closing Bell.” “In fact, a lot of times that results in a good setup because it’s a consolidation.”
“By investing today, the next three months historically are never brighter than they are here at the end of October,” deGraaf added.
