Stocks Move Lower As Treasury Yields Get To New Highs

S&P 500 futures are losing ground in premarket trading as rising Treasury yields put pressure on tech stocks. At the time of writing, Nasdaq futures are down by about 1% ahead of the market open.

The yield of 10-year Treasuries has recently made an attempt to settle above 1.77% before pulling back towards 1.75%. Bond traders remain concerned about rising inflation and sell U.S. government bonds, pushing their yields higher.

Stock traders have mostly ignored rising yields in recent trading sessions but new highs attracted their attention. In case Treasury yields continue to move higher, tech stocks will likely find themselves under more pressure which will be bearish for S&P 500.

High Yields And Stronger Dollar Put Pressure On Precious Metals
Higher Treasury yields provided support to the U.S. dollar which moved higher against a broad basket of currencies. A combination of higher yields and stronger dollar served as a significant bearish catalyst for precious metals which found themselves under material pressure.

Gold declined below the $1700 level and is moving towards March lows near $1675. Meanwhile, silver is trying to settle below the support at $24.20. In this light, the start of the trading session will be challenging for shares of gold and silver miners.

I’d note that gold has been under material pressure since the beginning of this year, and all attempts to gain sustainable upside momentum yielded no results.

WTI Oil Declines Below The $61 Level As Suez Canal Reopens
WTI oil declined below the $61 level as ships started to move freely in one of the world’s most important trading routes. Now, traders will focus on the upcoming OPEC+ meeting which is scheduled to take place on April 1.

OPEC+ members are expected to extend current production cuts in order to support the market, but traders will keep an eye on all details of negotiations. Many OPEC+ members want to produce more oil at higher prices to provide support to their budgets which were hit by the coronavirus pandemic.

At the same time, OPEC+ would not like to ease production curbs too soon as demand remains fragile and oil may quickly decline towards the $50 level. Most likely, the oil market will remain volatile in the upcoming trading sessions as traders will react to any news about OPEC+ negotiations.

Subscribe to our newsletter

Don't miss new updates on your email