U.S. stock futures slipped early Monday, with bond yields on the rise as investors braced for a big week of earnings.
How are stocks trading?
- S&P 500 futures ES00, -0.22% fell 0.2% to 4,377.50.
- Dow Jones Industrial Average futures YM00, -0.12% fell 30 points, or 0.1%, to 34,328.
- Nasdaq-100 futures ES00, -0.22% slipped 0.3% to 13,850.
The S&P 500 SPX, -1.21% and Nasdaq Composite COMP, -2.14% each saw the second straight weeks of losses, down 2.1% and 2.6%, respectively, while the Dow DJIA, -0.33% fell 0.8% in a third-straight weekly drop.
Read: Recession fears and the stock market — is it too late to play defense?
What’s driving the markets?
Stock futures began tilting lower on Sunday, led by Nasdaq-100 futures as bond yields continued to climb across the curve. The yield on the 10-year Treasury note TMUBMUSD10Y, 2.830% rose 4 basis points to 2.864%, while that of the 2-year note TMUBMUSD02Y, 2.481% rose 4 b asis points to 2.488%.
Investors remain concerned about rising inflation and how that may weigh on the economy, as the Federal Reserve struggles to keep a lid on rising prices. Goldman Sachs’s chief economist Jan Hatzius and his team predicted the U.S. economy faces a 35% chance of recession in the next two years, and 15% over the next year.
“The main challenge for the Fed will be to reduce the jobs-workers gap and slow wage growth to a pace consistent with its inflation goal by tightening financial conditions enough to reduce job openings without sharply raising unemployment,” said Hatzius in a note dated Sunday, as he added that “history suggests this may be challenging.”
The National Association of Home Builder’ April index will be released at 10 a.m. Eastern. Comments are expected from St. Louis Fed President James Bullard later in the day.
China’s economy expanded 4.8% annually in the first quarter, which beat expectations. That still puts the country behind scheduled to reach an official target of 5.5% growth this year, with fresh COVID outbreaks not helping.
Earnings were in focus for Monday as well, with Bank of America Corp. BAC, -3.22% among the highlights ahead of the open on Monday, Netflix Inc. NFLX, -2.65% on Tuesday afternoon and Tesla Inc. TSLA, -3.66% on Wednesday afternoon. Eyes will also be on Twitter Inc. TWTR, -1.68%, which on Friday adopted a “poison pill” in the face of a takeover bid announced earlier in the week by Elon Musk. Those shares rose 2% in premarket trading.
A number of major banks, including Goldman Sachs Group Inc. GS, -0.10%, Morgan Stanley MS, +0.75% and Wells Fargo & Co. WFC, -4.51%, reported earnings last week, to mixed results.
Crude prices were declining, but natural-gas futures NGK22, +3.77% shot higher, up nearly 3% to $7.512 per million British thermal units to a level not seen in around 14 years.
Read: U.S. natural gas is trading at an ‘insane’ price — Here’s why it just hit a nearly 14-year high
Which companies are in focus?
- Bank of America said its quarterly profit fell by $1 billion but the financial giant beat Wall Street’s earnings targets and booked healthy loan growth. Shares were up 0.8% in premarket trade.
- Didi Global Inc. DIDI, -3.15% shares tumbled. The China ride-share giant, which is being investigated in its home country, said over the weekend that it will hold an extraordinary general meeting on May 23 to vote on a planned delisting from the New York Stock Exchange. The company reported a fall in fourth-quarter earnings.
— Mike Murphy contributed to this article
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