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US Stocks-Futures Decline As Yields Increase Following The Fed’s Announcement Of Higher Rates For Longer

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SSDI Benefits; Source- CNET

Growth company weakness contributed to a decrease in U.S. stock index futures on Thursday, which also saw a rise in Treasury yields after the Federal Reserve hinted at another rate hike this year.

Decease In Stocks Percentage

As the two-year and 10-year Treasury yields reached multi-year highs in premarket trading, rate-sensitive equities like Apple, Meta Platforms, Alphabet, and Nvidia decreased between 0.6% and 2.3%.

A dismal session for Wall Street was brought on by the U.S. central bank’s Wednesday announcement of a much-anticipated pause and revision of economic estimates along with cautions that the fight against inflation was far from finished.

According to the Fed’s revised quarterly predictions, there is a good probability that the key rate will be increased one more time in 2023, reaching a high range of 5.50%–5.75%, and that rates would remain much tighter through 2024 than originally anticipated.

Despite the fact that bets against the Fed’s hawkishness have largely paid off since officials began a campaign of monetary policy tightening in March 2022, some investors are sceptical the central bank will stick to its guns.

According to CME’s FedWatch tool, trader bets on the benchmark rate remaining steady in November and December were 71% and 54%, respectively.

For hints on the direction of interest rates and the status of the economy, investors will also watch economic data due later in the day, such as the weekly jobless claims and existing house sales figures.

Increasing In Inflation



The CBOE volatility index—also known as Wall Street’s “fear gauge”—hit its highest level in more than three weeks, signalling escalating investor apprehension.

In the meantime, recent listings’ poor performance following their debut highs has dimmed expectations of a probable IPO market rebound despite high interest rates and broader market falls.

The shares of marketing automation company Klaviyo dropped 3.2% in premarket trading to $31.7 after closing on Wednesday at a significant discount to their intraday debut high of $32.76. Instacart declined 1.4%, while Arm Holdings dropped 3.0% to $51.3 premarket, approaching its IPO price of $51 per share.

At 7:16 a.m. ET, the Nasdaq 100 e-minis were down 160.75 points, or 1.06%, while the S&P 500 e-minis were down 34.75 points, or 0.78%. The Dow was down 188 points, or 0.54%, at the time.

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