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US pre-open: Futures lower as bond yields surge

(Sharecast News) - US futures were pointing to further losses ahead of the bell on Tuesday amid higher bond yields and fears that the Federal Reserve may not move lower interest rates quite as quickly as Wall Street had initially hoped for. As of 1230 GMT, Dow Jones futures were down 0.12%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.13% and 0.09% weaker, respectively.

The Dow closed 274.30 points lower on Monday, erasing gains recorded in the final session of the previous week.

Tuesday's pre-market declines follow those seen in the previous session, fuelled by comments from Federal Reserve chairman Jerome Powell that a rate cut was unlikely to come from the central bank's next meeting in March. While the comments sent the yield on the benchmark 10-year Treasury note north on Monday, it was little changed ahead of the bell on Tuesday at 4.164%, having been at 3.86% just a few days ago.

Trade Nation's David Morrison said: "Investors have been repricing everything since last week's Fed meeting and Friday's non-farm payroll surprise. Finally, they are listening to what the Fed has been saying for months now.

"Markets are adjusting. According to the CME's FedWatch Tool, the May Fed meeting is now the favoured time for the first cut, although June seems more reasonable based on the Fed's comments. In addition, the market is now pricing in rate cuts of between 100-125 basis points this year, down from 150 last week."

In the corporate space, Eli Lilly posted better-than-expected quarterly results, driven by strong Mounjaro revenues, while DuPont narrowly beat estimates with its latest quarterly earnings but fell short of revenue expectations.

Still to come, Amgen, Chipotle and Ford will all report their latest set of quarterly earnings after the close.

On the macro front, Federal Reserve Bank of Cleveland president Loretta Master, Minneapolis president Neil Kashkari, and Boston Fed president Susan Collins will all deliver speeches on Tuesday.

Reporting by Iain Gilbert at Sharecast.com

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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