Thursday June 9th


Stock futures give up gains as Treasury yields rise

U.S. stock index futures slipped on Thursday morning as interest rates moved higher. Futures on the Dow Jones Industrial Average traded 72 points lower, or 0.2%. S&P 500 and Nasdaq 100 futures slid 0.3% and 0.5%, respectively. Futures were higher earlier in the morning, but lost ground as Treasury yields pushed higher following an update from the European Central Bank. Tesla rose more than 2% after UBS upgraded the stock to buy. The firm also said the electric vehicle maker can rally more than 50% from current levels. Shares of Five Below dropped more than 7% in the premarket after first-quarter sales came in softer than anticipated and the retailer shared weak guidance for the current period. Target gained about 1% after announcing a dividend hike. The payout raise comes after a disappointing first quarter and a profit warning for the second quarter from the retail giant. The European Central Bank confirmed its plan to hike interest rates in July and possibly again in September. The ECB also raised its inflation projection for 2022 to 6.8%, up from 5.1% previously, and lowered its growth outlook. On Wednesday, the Dow dipped 269.24 points, or 0.81%, to 32,910.90, while the S&P 500 shed 1.08% to close at 4,115.77. The Nasdaq Composite slid 0.73% to finish at 12,086.27. Investors on Wednesday continued to look for signs of slowing economic growth ahead of May’s consumer price index reading slated for Friday. The data is expected to come in slightly below April’s numbers and could indicate that inflation has reached its peak. Meanwhile, the bond market gave little hope to investors as the 10-year Treasury yield rose above the 3% mark. Oil prices also spiked to a 13-week high, with U.S. West Texas Intermediate crude gaining 2.26% to settle at $122.11 per barrel. Fundstrat’s Tom Lee told CNBC’s “Closing Bell: Overtime” on Wednesday that the likelihood of a soft landing from the Federal Reserve is growing and stocks have priced in “almost a full-blown recession.” “I think there’s a series of hikes coming, but it’s really the Fed being more hawkish than expectations that alarms markets,” he said. Initial jobless claims rose to 229,000 last week, worse than the 210,000 expected. Asia-Pacific stocks were mostly lower in Thursday trade, with mainland Chinese markets falling despite the release of better-than-expected May trade data. The Shanghai Composite in mainland China slipped 0.76% on the day to 3,238.95 while the Shenzhen Component dropped 1.851% to 11,810.58. Hong Kong’s Hang Seng index shed around 0.9%, as of its final hour of trading. In Japan, the Nikkei 225 closed slightly higher at 28,246.53 while the Topix index dipped fractionally to 1,969.05. South Korea’s Kospi ended the trading day mildly lower at 2,625.44. Oil prices hovered near three-month highs on Thursday after parts of Shanghai imposed new Covid-19 lockdown measures, though news of China’s stronger-than-expected exports in May boosted the demand outlook. Brent crude futures for August dipped 29 cents to $123.29 a barrel, while U.S. West Texas Intermediate crude for July was at $121.76 a barrel, down 35 cents. Both benchmarks closed on Wednesday at their highest since March 8, matching levels seen in 2008.