S&P 500 futures climbed 0.5% on Friday as Wall Street tried to steady itself after a Treasury-yield-driven sell-off. The index is still down 1.9% for the week, on pace to snap a three-week winning streak, while the broader retreat also hit the Nasdaq, the Dow and global stock benchmarks.
S&P 500 futures rebound from Thursday's drop
S&P 500 futures climbed 0.5% on Friday, alongside a 0.7% gain in Dow Jones Industrial Average futures and a 0.8% advance in Nasdaq-100 futures. The move follows a losing Thursday session, when rising Treasury yields resumed pressuring equities.
During that session, the S&P 500 dropped 0.9% and the Nasdaq Composite fell 1%. That pullback left the S&P 500 down 1.9% for the week, putting it on pace to snap a three-week winning streak, while the Nasdaq is off 2.5%. The Dow has fallen 1.8% week to date, on track for back-to-back weekly losses.
Bond-market intervention fails to calm yields
The sell-off traces back to Treasury yields resuming their march higher even after the government tried to stem the selloff in the Treasury market. Investors have grown wary of rising inflation tied to higher oil prices, which has kept long-dated bonds under pressure.
Ulrike Hoffmann-Burchardi, chief investment officer of the Americas at UBS, said the Treasury cannot fund buybacks by creating money the way the Federal Reserve can during quantitative easing. According to CNBC: "the operation reshapes the maturity profile of debt held by investors" rather than reducing the total debt markets must absorb, she wrote, adding that it neither removes the government's financing needs nor resolves concerns about Treasury supply.
Global markets feel the spillover
The downturn also reached stocks beyond the U.S., with the MSCI All Country World Index on track for a weekly decline of 1.5%, its biggest drop in five weeks. European stocks edged higher in early Friday trade after a mixed open, with the Stoxx 600 index 0.1% higher while London's FTSE 100 held flat and Germany's DAX gained 0.2%.
In Asia, Japan's Nikkei 225 closed 0.30% lower, while South Korea's Kospi rose 0.88% and Australia's S&P/ASX 200 fell 0.27%. Mainland China's CSI 300 closed 0.57% higher.
Source: CNBC
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