Bond yields reached a two-year high as the stock futures fell

The futures of US stocks plummeted and bond yields reached two-year highs, exacerbating investors’ fears that rising interest rates would push back large technology stocks that dominated the markets.

The futures for the S&P 500 fell 1% on Tuesday U.S. markets closed Monday For a public holiday. Technology-focused Nasdaq-100 contracts fell 1.6% and the Dow Jones Industrial Average fell 0.9%.

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Technology stocks came under pressure in January as yields on government securities soared. On Tuesday, the benchmark 10-year Treasury note yield fell to 1.827% from 1.771% on Friday, its highest level in two years. Yields rise when prices fall.

In pre-market tradingShares of Tesla, an electric vehicle manufacturer

Twitter

And

Meta platforms

-Formerly known as Facebook-Each fell about 2%.

Shares

Activision Blizzard

Then 30% higher than the primarket The Wall Street Journal Said

Microsoft

The deal to buy the video game Heavyweight is near Claims about workplace misconduct.

Many financial institutions, including Goldman Sachs, recorded earnings before the market opened. Profits have begun to fall on some of the big banks that have benefited from the turbulent epidemic economy. Shares of Goldman Sachs fell 4% after reporting on the primer market Decline in fourth-quarter profit.

Shares of Alibaba, listed in the US, fell 4.3% after Reuters reported that the Biden administration was reviewing whether the e-commerce company Cloud Business would pose a national security risk.

Investors expect a Tight labor market And rising inflation will push the Federal Reserve to make multiple rate hikes this year. The yield on the two-year government bond rose to 1.028% — the highest level since February 2020 — from 0.965% on Friday, signaling expectations for higher rates. Higher yields will reduce the attractiveness of future returns promised by many technology stocks.

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Interest-rate futures markets indicate investors are betting on four to five interest rate hikes this year, from three to four Fridays

CME Team.

“Markets are still trying to quantify the rate hike. The market only expected a rate hike for 2022 in October, and now expects it to be four,” said Edward Park, chief investment officer at Brooks McDonald’s, a UK investment firm. Reflects uncertainty. “

The Cboe Validity Index, also known as the Wall Street Fear Cage, also known as the VIX, rose to -21.53, a one-month high.

Investors expect the Federal Reserve to make several rate hikes this year.


Photo:

Timothy A. clary / Agence France-Presse / Getty Images

Oil prices soared as geopolitical tensions in the Middle East added to concerns about tight distribution. The Future for the West Texas Intermediate, a major quality of U.S. crude oil, A barrel increased 2% to $ 84.96. If the contracts are above $ 84.65 per barrel, it will indicate their maximum closing level after October 2014. Yemen’s pro – Iranian Houthi rebels say they are behind. Airstrikes in the United Arab Emirates On Monday, intense fighting spread across the region.

Overseas, pan-continental Stoxx Europe 600 fell 0.9%, with huge losses in the technology and travel and leisure sectors. Shares

GAM Holding

The Swiss asset management company fell 14% after claiming a net loss of about $ 33 million for 2021.

The rise in treasury yields boosted bond yields worldwide. Benchmark 10-year German bond yield traded down to minus 0.005% on Tuesday, from minus 0.061% on Monday, on the verge of crossing positive terrain for the first time since 2019.

Business Web.

Although China’s Shanghai joint stock gained 0.8%, key Asian indices fell sharply. South Korea’s Kospi fell 0.9%, Japan’s Nikkei 225 0.3% and Hong Kong’s Hong Cheng 0.4%.

Last year saw the largest appreciation of the US dollar since 2015. This is good for many US consumers, but it could also have an impact on stocks and the US economy. Diane Roboin of the WSJ explains. Photo Description: Sebastian Vega / WSJ

Write to Caitlin Ostroff at [email protected]

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