Wall Street stock futures were little changed on Wednesday, as an accelerating bond rout took a breather and investors braced for the fallout from the historic ouster of the US House Speaker.
Dow Jones Industrial Average (^DJI) futures edged up 0.1%, after a brutal selloff in stocks Tuesday that sent the benchmark into the red for the year. Futures on the S&P 500 (^GSPC) and on the tech-heavy Nasdaq 100 (^NDX) were both up around 0.1% too.
The indexes suffered deeper losses earlier in the morning as US government bond yields climbed, with the 30-year Treasury yield (^TYX) reaching 5% for the first time since 2007. Yields have since tipped lower, pulling the 10-year yield (^TNX) below 4.8%.
The selloff in stocks is all about the “pain trade” in bonds, some strategists believe, as investors increasingly accept the era of low interest rates is coming to an end. That has driven a fundamental shift in how investors think about everything from stocks to currencies, and the role bonds play in their portfolios.
Two more Federal Reserve officials on Tuesday joined colleagues in hammering home the message that rates are likely to stay high for a long time — a message that has spurred the surge in yields.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
At the same time, higher-than-expected data on job openings boosted bets for another hike this year. The next key reading on the US labor market will be the monthly payrolls print on Friday, likely to be closely watched for yet another sign the Fed has even more to do.
The historic ouster of House Speaker Kevin McCarthy on Tuesday ramped up the uncertainty in the market, given voting in a replacement likely means weeks of chaos and gridlock for other business. That heightens the odds of a US government shutdown that could disrupt the economy, with a deadline due in just weeks.
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KStock futures steady as bond pressure eases
The major US stock indexes traded around the flatline on Wednesday, after pressure from rising Treasury yields helped drive steep losses the previous day.
Futures on the S&P 500 (^GSPC) tipped 0.09% higher, while those on the Dow Jones Industrial Average (^DJI) edged up 0.07%, or 24 points. Contracts on the tech-heavy Nasdaq 100 were up 0.1%.
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