NEW YORK, June 9 ― US stock indexes were set to open lower today as rising bond yields pressured technology and growth stocks, while concerns around surging inflation and the path for interest rate hikes sapped risk appetite.
The benchmark US 10-year Treasury yield climbed to 3.06 per cent, its highest level since May 11. A spike in Brent crude prices above US$123 (RM540.45) a barrel made investors anxious ahead of the US consumer price index report on Friday.
Market participants fear a hot reading on inflation could keep the US Federal Reserve on its path to raise interest rates aggressively against the backdrop of a volatile stock market, strong consumer spending and tight labor market.
In the previous session, the S&P 500 snapped a two-day winning streak, dragged lower by chipmakers after a bearish brokerage report by Citi Research on Intel Corp.
“We're not going to see the market enjoy a robust recovery until there is a sense the inflationary pressures are easing as that will suggest the Fed has been moving in the right direction and the weakening of the economy has not been drastic,” said Quincy Krosby, chief equity strategist at LPL Financial.
“The market has been in a tight trading range. The volume in either scenario, buying or selling, has been weak and that is indicative of a market without commitment.” The U.S. central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to keep at it with 50 basis points increases at its meeting next week and again in July.
At 8.42am ET, Dow e-minis were down 29 points, or 0.09 per cent, S&P 500 e-minis were down 5.25 points, or 0.13 per cent, and Nasdaq 100 e-minis were down 28.25 points, or 0.22 per cent.
Rate-sensitive growth stocks like Microsoft Corp, Nvidia Corp, Alphabet Inc, Meta Platforms and Netflix Inc fell between 0.2 per cent and 0.8 per cent in premarket trading.
Tesla Inc rose 2.5 per cent as the electric automaker sold 32,165 China-made vehicles last month, up sharply from 1,152 in April. Brokerage UBS upgraded the stock to “buy” and raised its profit estimates for the next three years.
Alibaba Group slipped 4.1 per cent even as Reuters reported China's central leadership has given a tentative green light to Jack Ma's Ant Group to revive its initial public offering in Shanghai and Hong Kong.
Bloomberg News reported that Chinese financial regulators have started early-stage discussions on a potential revival of Ant Group's IPO. ― Reuters
