U.S. stock futures slipped early Thursday after the S&P 500 pulled back from a record and Treasury yields spiked to multidecade highs. A solid $39 billion 10-year note auction eased yields off their high, while investors look to earnings season for the market's next move.
Futures retreat after S&P 500's record high
U.S. stock futures were lower early Thursday, a day after the S&P 500 retreated from its record as yields spiked to multidecade highs. Dow Jones Industrial Average futures fell 132 basis points, or 0.26%, while S&P 500 futures dipped 0.15% and Nasdaq-100 futures were 0.21% lower.
Wall Street came off a losing session Wednesday. The S&P 500 dipped 0.2%, pulling back from an all-time high it reached just one day prior, while the Dow fell more than 340 points, or 0.7%, and the Nasdaq Composite slid 0.2%.
Treasury auction eases yield spike
The Treasury sold $39 billion of 10-year notes on Wednesday, and indirect bidders took more than 80% of the auction, above a 10-auction average of 72.4%. The sale helped the 10-year yield ease off its 24-year high during the session. Still, the 10-year Treasury yield was last seen 4 basis points higher at 5.3178%, with the 30-year yield up 4 basis points at 5.7064%. The Treasury is set to sell $22 billion of 30-year bonds later Thursday.
Higher yields have curbed investor appetite for equities in recent weeks, especially in parts of the market most exposed to higher borrowing costs. Industrials, for example, is the worst performing sector week to date.
Asia falls, earnings season in focus
Japan's Nikkei 225 was down 1.12% while South Korea's Kospi lost 2.04%. Australia's S&P/ASX 200 was 0.64% lower, mainland China's CSI 300 declined 0.43%, and Hong Kong's Hang Seng Index dropped 0.69%.
Many investors are maintaining an optimistic view, however, and expect that the start of earnings season could give the market the fuel it needs for the next leg higher. The S&P 500 is expected to post a blended earnings growth rate of roughly 30% in the third quarter, a third straight quarter of above-25% earnings growth, according to FactSet. Courtney Garcia, senior wealth advisor at Payne Capital Management, told CNBC: "It's not going to derail the market."
Investors will await results from PepsiCo before Thursday's open, and will also watch weekly jobless claims data for further direction.
Source: CNBC
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