US STOCKS-Futures dip on higher Treasury yields, jobless claims data awaited

BY Reuters | ECONOMIC | 05/09/24 05:54 AM EDT

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Futures: S&P off 0.34%, Nasdaq 100 down 0.44%, Dow down 0.27%

May 9 (Reuters) - U.S. stock index futures slipped on Thursday as Treasury yields rose further ahead of jobless claims data that could provide a clearer picture of the Federal Reserve's interest rate agenda for the year.

In a week lacking big catalysts, market momentum has stalled somewhat as investors look for fresh clues on the monetary policy outlook, after softer-than-expected payrolls data last week fueled bets of one or two rate cuts this year.

The S&P 500 ended flat on Wednesday after four sessions of gains and the Nasdaq slipped for a second day. The Dow Jones Industrial Average, however, stretched its winning streak to a sixth straight session and closed above 39,000 points for the first time in five weeks.

Money market traders are pricing in U.S. rate cuts of 43 basis points (bps) by the end of 2024, according to LSEG's rate probabilities app. Before the jobs data, they were pricing in just one rate cut due to signs of a resilient economy and sticky inflation.

Market focus will shift to weekly jobless claims data and remarks from San Francisco Fed President Mary Daly during the day.

Boston Fed President Susan Collins on Wednesday expressed confidence that the current setting of monetary policy will slow the economy in a way she believes will be necessary to get inflation back to the Fed's 2% target.

The yield on 10-year Treasury notes, the benchmark for global borrowing costs, edged up for a second day after the auction of 10-year notes.

That in turn piled pressure on megacap stocks such as Apple (AAPL) and Microsoft (MSFT) in premarket trading.

By 5:19 a.m. ET, S&P 500 e-minis dipped 17.5 points, or 0.34%. Nasdaq 100 e-minis slipped 79.75 points, or 0.44%, and Dow e-minis dropped 105 points, or 0.27%.

Arm Holdings tumbled 8.7% after the chip designer forecast full-year revenue below expectations even as March-quarter results beat estimates.

Rival Nvidia (NVDA) slipped 0.7%.

Tesla dipped 1.1% after Bloomberg News reported the electric vehicle maker's job cuts were escalating in China.

Robinhood Markets (HOOD) gained 5.4% after the online brokerage beat estimates for first-quarter profit, thanks to robust crypto trading volumes and rate hikes that boosted its net interest revenue.

Airbnb (ABNB) slid nearly 8% after the vacation rental company forecast second-quarter revenue below market expectations. (Reporting by Sruthi Shankar in Bengaluru; Editing by Devika Syamnath)

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.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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