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U.S. equity futures extended declines Thursday, while Treasury bond yields continued to test multi-week highs, as investors braced for a key series of economic and inflation data amid the worst week for global stocks in more than a month.
A sharp move higher in Treasury yields, tied to renewed inflation risks and a wave of fresh supply, pull stocks lower Wednesday, with the S&P 500 finishing 0.74% in the red and the Dow extending it one-week slump to just over 1,400 points.
The Treasury’s third coupon auction of the week, a $44 billion sale of 7-year notes, drew weak foreign and domestic demand as yields on the paper surged, adding to the market’s multi-day selloff that has taken 10-year notes to 4.594%, the highest in more than a month.
Related: Bond markets sound inflation alarm, testing stocks rally
Bond markets will also face a massive wave of new supply next month, with around $340 billion in new debt issuance from the U.S., Europe and the United Kingdom, according to BNP Paribas data.
That’s added to pressure on stocks, which have been trading without the benefit of top-tier corporate earnings headlines and looking towards today’s release of first quarter GDP data and tomorrow’s reading of the Federal Reserve’s preferred inflation gauge, the PCE Price Index.
Stocks will navigate a series of economic and inflation releases over the coming days amid the worst week for the S&P 500 in more than a month.
Michael M. Santiago/Getty Images
On Wall Street, futures contracts tied to the S&P 500, which is still up 4.6% for the month, are priced for an 18 point opening bell decline ahead of both the revised GDP data release and weekly jobless claims figures at 8:30 am Eastern time.
Futures linked to the Dow suggest a 320 points slump, although a large portion of that is tied to the 16% plunged in Salesforce (CRM) , which issued a muted sales outlook following a mixed second quarter earnings report. The Nasdaq, meanwhile, is called 50 points lower.
Other stocks on the move include PayPal (PYPL) , which jumped 2.4% following an upgrade for the online payments group from Mizuho and AI software group UiPath (PATH) , which plunged 30% following a disappointing first quarter earnings update.
Costco (COST) shares were marked 0.3% higher in premarket trading ahead of the bulk discount retailer’s third quarter earnings after the close of trading.
Related: Fed rate cuts face big reset on renewed inflation risks
In overseas markets, Europe’s Stoxx 600 edged 0.3% higher in Frankfurt while Britain’s FTSE 100 rose 0.23% in London on rate cut hopes from their respective central banks.
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Overnight in Asia, the selloff on Wall Street pulled the Nikkei 225 into a 1.3% decline, its third straight day of losses and the lowest closing level since April 26.
The region-wide MSCI ex-Japan benchmark, meanwhile, was marked 1.25% lower into the close of trading.
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