Tech led a slide in US stock futures on Monday, while the dollar and bond yields climbed amid fading hopes for interest-rate cuts ahead of this week’s key consumer inflation report.
S&P 500 futures (ES=F) sank 0.8%, while those on the Nasdaq 100 (NQ=F) tumbled 1.2%. Contracts on the Dow Jones Industrial Average (YM=F), which includes fewer tech stocks, fell 0.3%.
Stocks are shaping up for another rough session after Friday’s plunge, which wiped out all year-to-date gains for Wall Street’s major gauges. A hot December jobs report has rattled markets, spurring concern that signs of strength in the economy will encourage the Federal Reserve to keep rates higher for longer.
At close: January 10 at 4:56:48 PM EST
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The 10-year Treasury yield (^TNX) added to recent gains to touch a 14-month high, trading close to 4.8%, and the 30-year yield (^TYX) neared 5% as US bonds sold off. Meanwhile, the dollar (DX-Y.NYB) surged to a two-year high against major currency peers, with the UK pound (GBPUSD=X) in particular coming under pressure.
As of Monday, traders are betting there will be no rate cut until at least September, per the CME FedWatch tool, and that the Fed will lower borrowing costs by just 30 basis points in the whole of 2025.
That has intensified the spotlight on the Consumer Price Index reading for December, due on Wednesday, given one big concern for markets is that inflation won’t cool to the central bank’s 2% target.
Adding to the gloom, oil prices rose around 2% to their highest levels in five months after the US imposed tougher sanctions on Russia’s crude industry than expected, risking supply to China and India. Brent (BZ=F) climbed to over $81 a barrel, while West Texas Intermediate (CL=F) changed hands above $78.
On the corporate front, shares of Nvidia (NVDA) and Tesla (TSLA) slid as all the “Magnificent Seven” tech megacaps lost ground in the market turmoil. Europe’s largest pension fund revealed that it sold its entire stake in Tesla over CEO Elon Musk’s pay package.
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