Stock futures for the Dow, S&P 500 and Nasdaq-100 fell Monday as Treasury yields pushed toward multiyear highs. Standard Chartered says the bond selloff has opened a rare entry point, projecting the S&P 500 could reach 8,400 over the next year even as it flags downside risk if yields keep climbing.
US stock futures fell Monday as Treasury yields pushed higher. Dow Jones Industrial Average futures slipped 108 points, or 0.2%. S&P 500 futures were down 0.2%, and Nasdaq-100 futures shed 0.3% ahead of the Federal Reserve's September meeting minutes, due Wednesday.
Treasury yields extend their climb
The benchmark 10-year Treasury yield ticked higher by one basis point Monday, extending a move that has pushed yields to multiyear highs on persistent inflation worries. It hovered around 5.269% early Monday, after touching its highest level since 2002 last week. The 30-year bond rate held near 5.626%, a 24-year high reached last Thursday.
Investors are also watching Wednesday's Fed minutes after the central bank raised its overnight rate by 0.25 percentage point last month. Last week's surprisingly lackluster jobs report helped ease concerns about another rate hike this month, though bond-market pressure has continued to weigh on futures.
Standard Chartered sees opportunity in the selloff
Standard Chartered says the historic bond selloff has created a rare entry point for investors with a six- to 12-month horizon. Senior strategist Rajat Bhattacharya wrote that bond arithmetic points to losses below 1% if the 10-year yield climbs to 6%, and gains of more than 10% if it falls to 4.5%. The bank's global chief investment office views both bond and money markets as overly hawkish on the Fed, and it expects disinflation to return as oil-price and tariff pressures ease in the new year.
Standard Chartered projects the S&P 500 could climb to 8,400 over the next year. But the bank warns that a continued advance in the 10-year yield to 5.6% could push the index into negative territory from the 7,666 level where it traded at the time of writing.
Sources: CNBC, MarketWatch
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