Dow Poised to Slip, Bond Yields Climb—and What Else Is Happening in the Stock Market Today

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U.S. stock market futures indicated a stagnant open Friday after a rally Thursday.

Angela Weiss / AFP via Getty Images

Wall Street was set for a stagnant open Friday after the Dow Jones Industrial Average rallied more than 500 points Thursday, as bond yields remained elevated and oil prices consolidated gains near three-year highs.

Futures for the Dow Jones Industrial Average indicated an open 90 points lower after the index rallied 506 points Thursday to close at 34.764. Futures for the S&P 500 and Nasdaq indicated a similar open.

Overseas, Tokyo’s Nikkei 225 rose 2.1% as Japanese traders returned from holiday and welcomed upbeat inflation data. Germany’s DAX underperformed in Europe, down 0.8%, as the country heads into a federal election over the weekend that will replace longtime Chancellor Angela Merkel.

“The big news of the last 24 hours has been a galloping global yield rise worthy of the finest thoroughbred,” said Jim Reid, a strategist at Deutsche Bank. 

“A hawkish Fed meeting, with the dots increasing and the end of quantitative easing potentially accelerated, didn’t quite have the ability to move markets but the global dam finally broke yesterday with Norway being the highest profile developed country to raise rates this cycle (expected), but more importantly a Bank of England meeting that saw the market reappraise rate hikes,” Reid added.

The yield on 10-year U.S. Treasuries climbed to 1.43% Thursday in the biggest daily increase since February, with the yield on that note approaching 1.44% Friday.

In commodity markets, futures for international benchmark Brent crude were trading hands around $76.60 a barrel after closing at $77.25 on Thursday—the highest close since 2018. U.S. oil futures were holding steady above $73.30.

Fears surrounding the potential failure of China Evergrande (3333.H.K.)—the world’s most indebted property developer—remained on the back burner. Markets largely pushed aside Evergrande concerns Thursday, despite indications that China was preparing for the group’s eventual collapse. The latest news is a lack of news: there remains no update on whether Evergrande has paid the near $84 million in offshore bond interest due Thursday.

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