Early on Tuesday, U.S. stock futures declined as traders anticipated the start of the corporate earnings season and Treasury rates increased. The S&P 500 SPX gained 4 points, or 0.08%, to 4784 on Friday, while the Nasdaq Composite COMP gained 3 points, or 0.02%, to 14973. The Dow Jones Industrial Average DJIA sank 118 points, or 0.31%, to 37593 on Friday.
What propels markets?
Following the Martin Luther King, Jr. holiday, U.S. investors returned from an extended weekend cautiously, with equity index futures weakening as traders saw benchmark borrowing prices BX:TMUBMUSD10Y rise back towards 4%.
Following remarks made by Robert Holzmann, a member of the European Central Bank’s governing council, in a Davos interview that persistent inflation would prevent the ECB from lowering interest rates this year, U.S. Treasurys were attempting to catch up to the Monday spike in German bund yields BX:TMBMKDE-10Y.
Despite Holzmann’s reputation as a monetary hawk, his rebuke of the market’s expectations for rapid rate reduction in 2024 fits in with recent efforts by Federal Reserve officials to temper expectations about the speed at which the U.S. central bank may also loosen policy this year.
Following remarks made by Robert Holzmann, a member of the European Central Bank’s governing council, in a Davos interview that persistent inflation would prevent the ECB from lowering interest rates this year, U.S. Treasurys were attempting to catch up to the Monday spike in German bund yields BX:TMBMKDE-10Y.
Despite Holzmann’s reputation as a monetary hawk, his rebuke of the market’s expectations for rapid rate reduction in 2024 fits in with recent efforts by Federal Reserve officials to temper expectations about the speed at which the U.S. central bank may also loosen policy this year.
U.S. economic updates set for release on Tuesday include the Empire State manufacturing report for January, due at 8:30 a.m. Eastern.
