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U.S. equity futures moved lower in early Thursday trading, while Treasury yields jumped and the dollar steadied, following on from a record close for the Nasdaq that extend the market’s solid late-year rally.
Tech stocks powered markets higher Wednesday following a November inflation report that matched Wall Street’s forecasts and cemented the case for an end-of-year rate cut from the Federal Reserve.
Core price pressures held at 3.3%, while the headline reading ticked modestly higher to 2.7%, but both monthly gauges were largely unchanged, allowing the Fed wiggle-room for a quarter point reduction next week in Washington.
Treasury bond yields, however, jumped higher on the session, and in overnight trading, following data showing a staggering $367 billion budget deficit for the month of November, a record that was 17% higher than last year’s tally.
The Treasury will sell $22 billion in new 30-year bonds later today.
ECB President Christine Lagarde is expected to unveil a fourth rate cut for the currency area central bank later today in Frankfurt.
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Benchmark 10-year note yields, which held steady after a solid auction of $39 billion in new paper yesterday, were last marked 3 basis points higher at 4.302%, with 2-year notes trading at 4.181%.
The U.S. dollar index, meanwhile, was marked 0.12% lower against a basket of its biggest peers ahead of today’s European Central Bank rate decision and the Commerce Department’s reading of factory gate inflation at 8:30 am Eastern time.
On Wall Street, stocks are looking at a modestly lower open, with futures contracts tied to the S&P 500 priced for a 12 point decline and those linked to the Nasdaq suggesting a 70 point retreat from last night’s close, which was the first ever marked north of 20,000 points.
Tesla (TSLA) shares were marked 0.4% higher in premarket after closing at a fresh record high, the first since 2021, pegging CEO Elon Musk’s net worth at just over $400 billion.
Related: Goldman Sachs analyst reboots Tesla stock price target; share hit fresh record high
Adobe (ADBE) shares, meanwhile, slumped 10.1% after the cloud software group’s muted revenue outlook offset a stronger-than-expected fourth quarter earnings report.
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In overseas markets, Europe’s Stoxx 600 was marked 0.1% lower ahead of today’s ECB rate decision in Frankfurt, with markets betting on a fourth reduction from the Executive Board that would take its base deposit rate to 3%.
Overnight in Asia, Japan’s Nikkei 225 following last night’s record close for the Nasdaq with a tech-lead gain of 1.21%, while the regional MSCI ex-Japan benchmark rose 0.62% into the close of trading.
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