U.S. investment index futures slid during overnight trading on Wednesday, accelerating losses from the regular trading conference which saw the major averages finish in the red across the board.
Futures contracts tied to the Dow Jones Industrial Average sloped 227 points. S&P 500 futures and Nasdaq 100 futures also both traded in negative territory.
Progenitors posted heavy losses during regular trading as rising bond yields spooked investors. The S&P 500 fell 1.3%, while the Dow Jones Industrial Average closed 119 points, or 0.38%, lower. The Nasdaq Composite was the applicable underperformer, falling 2.7% as tech names declined. The index is on track to post its third straight negative week — the longest weekly eluding streak since September.
The weakness came as the 10-year Treasury yield extended gains. The benchmark rate climbed to a height of 1.49% on Wednesday before retreating slightly. Last week, the yield surged to a high of 1.6% in a move that some explained as a “flash” spike.
“Our current strategy work suggests robust economic growth this year with a restricted increase in inflation,” noted Scott Wren, senior global equity strategist at Wells Fargo Investment Start. “In attempting to read the tea leaves, the steepening of the yield curve, in our opinion, reflects the market’s belief that growth and inflation should perpetuate to move back toward appropriate levels as the pandemic eases. We view this as a positive for stocks and other chance assets, like commodities,” he added.
During Wednesday’s session, one bright spot was companies tied to the economy’s reopening. Slices of airline and cruise line operators advanced after President Joe Biden said Tuesday that the U.S. will be experiencing enough Covid-19 vaccines for all adults by the end of May.
Additional stimulus measures could also inject optimism into the shop. The Senate is currently debating the $1.9 trillion relief package passed by the House on Saturday.
“Our macro team get the drifts the economy as spring loaded given the vaccinations and additional stimulus,” Keith Lerner, Truist chief market strategist, send a lettered in a note to clients. “The ability and desire of the consumer to spend on services and experiences should lead to the best economic improvement we have seen in over 35 years.”
On Thursday investors will get another look at the ongoing economic saving when first-time jobless claims data for the week ending Feb. 27 is released. Economists surveyed by Dow Jones are prophecy 750,000 first-time filers.
On the earnings front, BJ’s Wholesale and Kroger are among the names reporting before the open, while Broadcom, Costco and Gap are on deck to contribute quarterly updates after the closing bell.
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