Market futures that are mixed are dragging stocks lower amid uncertainty. The main reason for this has to do with Treasury yield-backed securities. Investors are keeping an eye on this since the Federal Fed’s next policy session is set for.
investorplace author Bret Kenwell recently suggested about the possibility that the mix of bond
yields along with the 10-year Treasury yield increasing could be threatening the recent market rally. Today the yields of a variety of yields have risen to high levels and markets have reacted. With the Fed set to meet again in a matter of days, these increasing yields are of particular interest.
While these elements cast shadows over the market today but the news isn’t completely negative. Salesforce (NYSE: CRM) recently announced the fourth quarter’s earnings, which sent shares higher in trading after hours yesterday. Today, this trend has seen to see the Dow Jones Industrial Average climb as the stock of CRM increases by more than 10%. But both the S&P 500 as well as the Nasdaq Composite remain in the negative.
What investors need to be aware of in the coming months.
A Closer Look at the Forces Pushing Stocks Down
However, investors shouldn’t place too much faith in Salesforce creating a market rebound. Although the Dow is increasing but the momentum hasn’t made it into other markets. The overall outlook is negative. The situation is that Tesla (NASDAQ: TSLA) is down following the failure to release any significant news on Part 3 of the CEO Elon Musk’s Master Plan doesn’t bode well for the Nasdaq also. It’s likely to contribute to the downward momentum that is affecting stocks currently.
The Treasury yield data will keep investors alert and will be closely watched when the next Fed meeting is near. Per Yahoo! Finance:
“On the front of the Treasury curve, the yield on 2-year bonds remained close to its highest levels since 2007. The yield for 2-year notes was at 4.8 percent as of Thursday’s early morning, is considered to be the most accurate indicator of investor expectation of the Fed’s future direction for interest rates.”
The interest rate will be the focus until the Fed decides on its next decision. And , as investorplace’s Shrey Dua says that rate hikes might not end anytime in the near future. Indeed, the recent Consumer Price Index (CPI) and job report could indicate that more hikes are on their coming.
While markets are expected to recover, the forces that are pushing stocks lower will persist until the next session eases the uncertainty that is currently affecting markets.
As of the date when this article was published, Samuel O’Brient had not have (either either directly or in indirect ways) any positions in any of the securities mentioned in the article. The views expressed in this article are the opinions of the author according to the InvestorPlace.com publishing Guidelines.
Samuel O’Brient has covered financial markets and analysing economic policy for the past three years. His specialties include electronic vehicle (EV) stocks as well as green energy and NFTs. O’Brient is passionate about helping people to understand the intricate world of economics. He’s among the top 15percent of stock analysts on TipRanks.
