US futures fell on Thursday as investors waited for Federal Reserve Chairman Jerome Powell to comment on inflation prospects and the central bank’s views on rising bond yields.
S&P 500 futures fell 0.4%, suggesting that the benchmark may fall for the third day in a row after the opening bell. Nasdaq-100-related contracts fell 0.6%, indicating additional losses for technology stocks. Dow Jones Industrial Media futures fell 0.3%.
A recent sale of government bonds has raised Treasury yields, reducing investors’ appetite for technological stocks that have grown in a low-yield environment. Some money managers are betting that an additional fiscal stimulus in the US will increase inflation and cause the Fed to raise interest rates sooner than expected. This has led to an increase in real yields or bond yields after adjusting for inflation expectations.
Investors say they hope Mr. Powell will answer questions about how he sees rising yields when he speaks at The Wall Street Journal Jobs Summit at 12:05 pm ET. Central bank officials have previously said they will maintain weak monetary policy until the economy is stronger and that they see rising bond yields as a signal that investors are optimistic about the US economic recovery.
“Powell’s comments today will be really important,” said Hugh Gimber, a strategist at JP Morgan Asset Management. “Clearly, what we have seen in recent weeks is that stocks are being interrupted by the pace of real real growth, which puts the Fed in a difficult position.”