U.S. Stocks May See Further Downside As Treasury Yields Rebound

Stocks may move to the downside in early trading on Monday, adding to the steep losses posted last week. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.

The downward momentum on Wall Street comes as treasury yields have rebounded amid ongoing concerns about the outlook for interest rates.

Following the pullback seen last Friday, the yield on the benchmark ten-year note has moved back to the upside, briefly peeking above the key 5 percent level.

Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

On Friday, the Commerce Department is due to release its report on personal income and spending, which includes readings on inflation said to be preferred by the Federal Reserve.

Traders are also likely to keep an eye on reports on new home sales, durable goods orders, pending home sales and initial jobless claims in the coming days.

The earnings season also continues to pick up steam this week, with a slew of big-name companies due to report their quarterly results.

Stocks moved sharply lower over the course of the trading day on Friday, extending the downward move seen over the two previous sessions. With the extended decline, the Nasdaq and the S&P 500 fell to their lowest closing levels in well over four months.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Nasdaq plunged 202.37 points or 1.5 percent to 12,983.81, the S&P 500 tumbled 53.84 points or 1.3 percent to 4,224.16 and the Dow slid 286.89 points or 0.9 percent to 33,127.28.

For the week, the Nasdaq plummeted by 3.2 percent, the S&P 500 dove by 2.4 percent and the Dow tumbled by 1.6 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index slid by 0.8 percent, while China’s Shanghai Composite Index slumped by 1.5 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is just below the unchanged line, the U.K.’s FTSE 100 Index is down by 0.5 percent and the German DAX Index is down by 0.7 percent.

In commodities trading, crude oil futures are falling $0.39 to $87.69 a barrel after slipping $0.29 to $88.75 a barrel last Friday. Meanwhile, after climbing $13.90 to $1,994.40 an ounce in the previous session, gold futures are edging down $2.70 to $1,991.70 an ounce.

On the currency front, the U.S. dollar is trading at 149.91 yen versus the 149.86 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0610 compared to last Friday’s $1.0594.

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