Futures Pointing To Initial Weakness On Wall Street
23 Outubro 2024 - 10:08AM
IH Market News
The major U.S. index futures are currently pointing to a lower
open on Wednesday, with stocks likely to move back to the downside
after recovering from early weakness to end the previous session
roughly flat.
The downward momentum on Wall Street comes amid a continued
increase by treasury yields, which have moved sharply higher over
the past few sessions.
The ten-year yield has risen to its highest level in almost
three months amid worries the Federal Reserve will lower interest
rates slower than previously anticipated.
After the Fed slashed interest rates by 50 basis points last
month, CME Group’s FedWatch Tool is currently indicating a 91.0
percent chance of just a 25 basis point rate cut next month.
A steep drop by shares of McDonald’s (NYSE:MCD) is likely to
weigh on the Dow, with the fast food giant plunging by 6.8 percent
in pre-market trading.
McDonald’s is under pressure after the Center for Disease
control said a severe E. coli outbreak in Mountain West states has
been linked to the chain’s Quarter Pounders.
Coffee giant Starbucks (NASDAQ:SBUX) is also seeing significant
pre-market weakness after reporting a decrease in fiscal fourth
quarter sales and suspending its guidance for fiscal year 2025.
Meanwhile, shares of AT&T (NYSE:T) are likely to see initial
strength after the telecom giant reported better than expected
third quarter earnings.
After coming under pressure early in the session, stocks
regained ground over the course of the trading day on Tuesday. The
major averages climbed well off their worst levels of the day
before ending the day little changed.
The major averages moved to the downside going into the close,
finishing narrowly mixed. While the Nasdaq rose 33.12 points or 0.2
percent to 18,573.13, the Dow edged down 6.71 points or less than a
tenth of a percent to 42,924.89 and the S&P 500 slipped 2.78
points or 0.1 percent to 5,851.20.
The early weakness on Wall Street partly reflected renewed
concerns about the outlook for interest rates following a recent
surge by U.S. treasury yields.
Treasury yields have moved notably higher in recent days amid
worries about the U.S. fiscal deficit and comments from Federal
Reserve officials hinting at gradual rate cuts.
The subsequent recovery by the markets came even though the
yield on the benchmark ten-year note crept up to a nearly
three-month closing high, as traders remain optimistic about the
economic outlook
A steep drop by shares of Verizon (NYSE:VZ) contributed to the
dip by the Dow, with the telecom giant tumbling by 5.0 percent on
the day.
The slump by Verizon came after the company reported third
quarter earnings that beat analyst estimates but weaker than
expected revenues.
Fellow Dow component 3M (NYSE:MMM) also moved to the downside
even though the industrial conglomerate reported third quarter
earnings that exceeded expectations.
On the other hand, shares of General Motors (NYSE:GM) spiked by
9.8 percent after the auto giant reported better than expected
third quarter results.
Housing stocks moved sharply lower amid concerns about the
outlook for interest rates, resulting in a 3.1 percent plunge by
the Philadelphia Housing Sector Index. The index pulled back
further off the record closing high set last Friday.
Substantial weakness was also visible among computer hardware
stocks, as reflected by the 2.3 percent slump by the NYSE Arca
Computer Hardware Index.
Logitech (NASDAQ:LOGI) helped lead the sector lower, with the
computer accessories maker plummeting by 8.5 percent despite
reporting better than expected fiscal second quarter results.
Telecom and airline stocks also saw notable weakness on the day,
while tobacco and gold stocks showed significant moves to the
upside.
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