NEW YORK, May 10 — US stock index futures slid yesterday as rising US Treasury yields weighed on growth stocks amid prospects of aggressive policy tightening by the Federal Reserve, with fears of a sharp economic slowdown in China also dampening the sentiment.
Futures tracking the Nasdaq 100 index tumbled about 2 per cent. Megacap stocks Microsoft Corp, Amazon.com, Apple Inc, Google-owner Alphabet Inc, Meta Platforms and Tesla Inc fell between 1.9 per cent and 3.2 per cent in premarket trading.
Yield on the benchmark 10-year Treasury note rose to 3.19 per cent, its highest level since November 2018, as data last week underscored strength in the US economy and investors bet on bigger rate hikes by the Fed to curb surging inflation.
Most traders expect the US central bank to raise interest rates by 75 basis points at its June meeting, after increasing it by 50 basis points this month.
Technology-focused growth stocks have faced the brunt of the selloff this year, as their returns and valuations are discounted more deeply when yields rise.
The tech-heavy Nasdaq registered its lowest close since 2020 on Friday, notching a fifth straight weekly loss, its longest losing streak since the fourth quarter of 2012.
The S&P 500 growth index has dropped nearly 21 per cent year-to-date, compared to a 13.5 per cent fall in the benchmark S&P 500 index.
Globally, stocks tumbled and oil prices fell yesterday, sparked by weak China data and a tightened Covid-19 lockdown in Shanghai that deepened investors’ fears that the global economy is headed for a slowdown.
At 06.19am ET, Dow e-minis 1YMcv1 were down 446 points, or 1.36 per cent, S&P 500 e-minis EScv1 were down 67.75 points, or 1.64 per cent, and Nasdaq 100 e-minis NQcv1 were down 251.75 points, or 1.98 per cent.
Meanwhile, focus will be on US inflation data and a slew of Fed speakers appearances this week as investors seek clues on the path of interest rates.
Morgan Stanley fell 2.2 per cent to lead declines among the big banks. — Reuters