Wall Street Set to Open Lower as Treasury Yields Rise
Wall Street is expected to open lower on Monday as the 10-year Treasury yield reaches its highest level since 2007. Investors are awaiting comments from Federal Reserve Chair Jerome Powell and more data this week to assess the central bank’s interest-rate path. Powell and Philadelphia Fed President Patrick Hasker will speak at a roundtable discussion with local employers and small business owners on efforts to grow the economy. Later in the day, Cleveland Fed President Loretta Mester will speak on the outlook for the U.S. economy.
Treasury Yields Continue to Rise
The yield on the 10-year Treasury note has edged higher, reaching 16-year highs at 4.6371%. The yield on the 2-year note, which reflects interest rate expectations, remains above 5%. Market participants are concerned about the dislocation in the markets as the treasury market struggles.
U.S. Stocks Experience Quarterly Decline
In Q3, U.S. stocks ended lower, marking their first quarterly decline in 2023. Investors are grappling with the prospect of interest rates remaining higher for longer, fueled by inflation concerns due to a recent rally in crude prices. Economic data including U.S. manufacturing activity and job openings leading up to the monthly jobs report will provide more clues about the Fed’s interest-rate path.
Crypto-Linked Stocks See Gains
Crypto-linked stocks such as Riot Platforms, Marathon Digital, and Hut 8 Mining have seen gains in premarket trading following bitcoin’s surge to near two-month highs. Shares of Coinbase also climbed after receiving a payments license from Singapore’s central bank. Cybersecurity firm Zscaler and cloud security platform Datadog saw increases after being upgraded by brokerage Piper Sandler. Nvidia rose after a report that Goldman Sachs had upgraded the chipmaker’s stock, and Rivian Automotive advanced after its stock was raised to “outperform” by Evercore ISI.
Hot Take: Wall Street Prepares for Lower Opening Amid Rising Treasury Yields
Wall Street is bracing for a lower opening as the 10-year Treasury yield continues to climb. The market awaits comments from Fed Chair Jerome Powell and other economic data to gain insight into the central bank’s interest-rate path. Concerns about dislocation in the treasury market are mounting, and U.S. stocks experienced their first quarterly decline in 2023 due to inflation concerns caused by rising crude prices. However, crypto-linked stocks are seeing gains following bitcoin’s surge, and companies such as Coinbase, Zscaler, Datadog, Nvidia, and Rivian Automotive have also seen positive developments. It will be interesting to see how these trends unfold in the coming days.
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