(Reuters) – U.S. stock index futures on Monday as yields soared on expectations that the Federal Reserve will remain hawkish through much of 2025 after last week's solid jobs report. fell.
As of 5:44 a.m. ET, the Dow E-mini was down 133 points, or 0.32%, the S&P 500 E-mini was down 46.25 points, or 0.79%, and the Nasdaq 100 E-mini was down 255.25 points, or 1.21%. ) fell.
Futures tracking the domestically sensitive Russell 2000 index fell 1.1%, the lowest since September 2024. The index entered correction territory on Friday, down more than 2% from its intraday high in late November.
Wall Street's main indexes rose after several better-than-expected reports on employment and services activity raised expectations that inflation could remain high in the world's largest economy. It marked the second consecutive week of declines in previous trading.
Investors are also betting that the incoming Donald Trump administration's policies, such as tariffs and crackdowns on illegal immigration, will affect global trade and fuel prices, with the U.S. Federal Reserve also signaling uncertainty about the outlook for monetary policy. Factoring in the possibility of threatening pressure. President Trump is scheduled to take office on January 20th.
After an initial spike, long-term Treasury yields are now pegged at their highest levels since late 2024. [US/]
Data compiled by LSEG shows traders are no longer fully pricing in even one rate cut this year from the Fed, with futures reflecting only a 23.6 basis point cut through December of this year. Ta.
The consumer price index and the central bank's Beige Book of economic activity will both be released on Wednesday and could help investors gauge the central bank's policy outlook.
The risk-off stance has hurt mega-cap stocks, which have led much of the rally in U.S. stocks over the past two years. In premarket trading, Tesla Inc. fell 2.5%, Amazon.com Inc. fell 1.2% and Alphabet Inc. fell 1%.
Semiconductor stocks such as Nvidia fell 3%, Advanced Micro Devices fell 1.6% and Broadcom fell 2.9% as investors braced for new export restrictions from President Joe Biden's administration expected later in the day.
With stock valuations above long-term averages, companies' quarterly reports will be in the spotlight later this week.
Major financial institutions JPMorgan Chase, Wells Fargo, Goldman Sachs and Citigroup are scheduled to release reports on Wednesday. Shares of both banks fell nearly 1% in light pre-market trading.
Oil stocks in particular rose. While SLB rose 1%, Occidental Petroleum rose 1.1% and Chevron rose 0.9% as crude oil prices rose due to expanded U.S. sanctions on Russian oil.
(Reporting by Johan M. Cherian in Bengaluru; Editing by Pooja Desai)
