US STOCKS-Futures dip as bond yields extend gains ahead of jobless claims data

BY Reuters | ECONOMIC | 05/09/24 07:50 AM EDT


Weekly jobless claims due at 8:30 a.m. ET


Airbnb (ABNB) falls on weak Q2 revenue forecast


Futures down: S&P 0.23%, Nasdaq 0.29%, Dow 0.24%

By Sruthi Shankar and Shristi Achar A

May 9 (Reuters) - U.S. stock index futures slipped on Thursday as Treasury yields extended gains ahead of jobless claims data that is expected to offer more clues on the Federal Reserve's monetary policy path for the year.

Chip designer Arm Holdings tumbled 8.8% in premarket trading as its full-year revenue forecast came in below expectations after a fourth-quarter beat. Bigger rival Nvidia (NVDA) also slipped marginally.

Other megacap stocks such as Apple (AAPL) and Meta Platforms (META) fell 0.2% and 0.4%, respectively, as 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.

In a week lacking big catalysts, market momentum has stalled somewhat as investors look for more clarity on potential interest rate cuts, after softer-than-expected payrolls data last week fueled bets of one or two cuts this year.

"We believe that the next move from the Fed would be a cut," said Mohit Kumar, chief economist Europe at Jefferies.

"Next week's US CPI could prove to be one of the catalysts, but if the range still hold then we could be looking at the employment report in early June as the next potential catalyst."

Money market traders are pricing in U.S. rate cuts of 44 basis points (bps) by the end of 2024, according to LSEG's rate probabilities app.

Market focus will be on 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 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.

At 07:10 a.m. ET, Dow E-minis were down 94 points, or 0.24%, S&P 500 E-minis were down 12 points, or 0.23% and Nasdaq 100 E-minis were down 52.75 points, or 0.29%.

Robinhood Markets (HOOD) gained 4.5% 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 8.3% after the vacation rental company forecast second-quarter revenue below market expectations. (Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Devika Syamnath and Shinjini Ganguli)

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.