US Stock Futures Slide as Yields March Higher

US Stock Futures Slide as Yields March Higher


Major US stock index futures drifted lower during the Asian session as Bond yields around the world inched higher. The rise in yields, especially the Treasury yields is putting pressure on overvalued/highly-valued stocks. This could continue for a while if the Federal Reserve remains aside watching the rally in yields. The US 10-year yields rose to 1.394%, the highest in almost a year. The Dow Jones Industrial Average futures dipped to 31311, the S&P500 futures declined to 3880, and Nasdaq futures fell to 13463. Investors will be looking forward to any hints on how the Federal Reserve will deal with the latest rapid rally in yields.


The dollar index which measures the greenback against a basket of major currencies rebounded slightly to 90.43, trimming losses incurred in the past two days. The dollar weakened against rivals as the Fed chairman Jerome Powell highlighted the Fed's dedication to tackling unemployment even if inflation overshoots. However, the extended upside push in yields provided partial support. The buck performance will be much correlated to the employment components in the short run. Also, market participants are looking forward to Powell's speech tomorrow for any hints on the Fed's status from rising yields. The EURUSD eased to 1.2108, and the USDJPY rebounded to 105.73.


Precious metals prices inched higher despite the rally in yields and dollar, as inflation expectations continue higher. The price of a gold ounce rose to $1795, the price of a silver ounce hovered near $27.50, palladium futures shot higher to a one-month high of $2424, while platinum held steady near $1280.


Oil prices edged higher, cutting losses, after a two-day correction. The optimism over economic recovery is boosting the reflation trade. The West Texas Intermediate crude March contract rose to $60.13, and Brent Blend April delivery appreciated to $63.99.

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