Stocks Pull Back As Treasury Yields Rise

S&P 500 futures are losing ground in premarket trading as traders take some profits off the table amid rising Treasury yields.

The sell-off in the U.S. government bond markets continues, pushing Treasury yields higher. The yield of 10-year Treasuries gained strong upside momentum and managed to get above the psychologically important 1.50% level.

Higher yields provided additional support to the U.S. dollar, which is gaining ground against a broad basket of currencies. Interestingly, stronger dollar and higher yields did not put pressure on gold, which remains stuck near the $1750 level. Meanwhile, silver gained upside momentum and is trying to settle above the resistance at $22.60 which is bullish for silver mining stocks.

Durable Goods Orders Increased By 1.8% In August
U.S. has just released Durable Goods Orders report for August. The report indicated that Durable Goods Orders grew by 1.8% month-over-month compared to analyst consensus which called for growth of 0.7%.

It remains to be seen whether better-than-expected Durable Goods Orders report will provide support to stocks today as traders are focused on the developments in Treasury markets.

WTI Oil Rallied Above The $75 Level
WTI oil gained strong upside momentum and managed to get above the $75 level as oil traders remained worried about supply. The current crisis in the UK, where many gasoline stations ran out of fuel, provided additional support to the bulls, although many analysts believe that gas shortage was caused by a lack of truck drivers.

While most stocks will likely find themselves under pressure at the beginning of today’s trading session, oil-related stocks are ready to move higher. Oil prices are close to yearly highs, while shares of oil-related companies trade far below levels that were reached back in June. In this situation, oil’s successful test of the $75 level may provide significant support to oil-related stocks.

Subscribe to our newsletter

Don't miss new updates on your email