US STOCKS-Futures dip as rising yields dent tech shares

BY Reuters | ECONOMIC | 11/23/21 06:48 AM EST

* Futures down: Dow 0.11%, S&P 0.21%, Nasdaq 0.47%

By Ambar Warrick and Devik Jain

Nov 23 (Reuters) - U.S. stock index futures fell on Tuesday as rising Treasury yields weighed on major technology stocks, while bank shares extended gains as investors priced in an early policy tightening by the Federal Reserve.

Bank stocks rose in premarket trade, tracking gains in yields after Jerome Powell's renomination as Fed Chair raised market expectations for an interest rate hike by as soon as June 2022.

Wall Street's biggest lenders rose between 0.2% and 0.8%, with Citigroup Inc (C) leading gains.

Rising yields continued to weigh on technology stocks, with majors including Meta Platforms (FB), Microsoft Corp (MSFT) and Apple Inc (AAPL) down between 0.3% and 0.5%. Large tech shares are sensitive to yields as investors discount future earnings against returns on debt.

The Nasdaq and the S&P 500 had slipped from record highs on Monday, as Powell's nomination prompted a volatile session.

Concerns over rising inflation also remained at the forefront, with investors fearing the potential economic impact of higher prices lasting longer than expected.

Focus is now on upcoming IHS business activity data, due at 9:45 a.m. ET (1445 GMT).

At 6:19 a.m. ET, Dow e-minis were down 40 points, or 0.11%. S&P 500 e-minis were down 10 points, or 0.21% and Nasdaq 100 e-minis were down 77 points, or 0.47%.

Among other premarket movers, Zoom Video Communications Inc (ZM) fell 8.8% after its third-quarter revenue growth rate slowed to 35% as demand for its video-conferencing tools eased from pandemic-fueled heights last year.

XPeng Inc rose 4.2% on the electric vehicle maker's upbeat third-quarter results and outlook. Most other EV makers, including Tesla Inc (TSLA) and Lucid Group (LCID), fell. (Reporting by Ambar Warrick in Bengaluru; Editing by Maju Samuel)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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