US Stocks Poised to Extend Retreat as Treasury Yields Rise

US Stocks Poised to Extend Retreat as Treasury Yields Rise, Concerns Mount Over Monetary Policy

As Treasury yields near the highest level this year, US stocks are facing a potential second day of declines, with futures for the S&P 500 falling 0.5%. The tech giant Salesforce Inc. tumbled 17% in premarket trading on slowing sales growth, adding to the overall market unease.

Global equities are on track for their worst week since mid-April, as US rate-cut expectations dwindle amidst sticky inflation. The recent jump in Treasury yields has raised concerns about restrictive monetary policy, with worries that funding the US deficit could further drive up yields.

Investors are closely watching upcoming data releases, including US gross domestic product numbers and inflation reports from the US and Europe. Fed officials are also set to speak, adding to the uncertainty surrounding monetary policy outlook.

Despite the fading optimism over US rate cuts, BlackRock International Ltd. is maintaining its focus on the front end and the belly of the US Treasuries curve for stability and income. The firm’s EMEA investment strategy head, Karim Chedid, highlighted the continued appeal of European and Japanese equities, with growing inflows into these markets.

In other news, the rand extended losses as South Africa’s election vote count progresses, with the ruling party expected to fall short of obtaining a parliamentary majority. Meanwhile, in commodities, crude prices slipped as traders await US stockpile data and an OPEC+ meeting for supply and demand clarity.

Corporate highlights include Goldman Sachs analysts initiating coverage of pharmaceutical stocks, China imposing a record fine on PricewaterhouseCoopers LLP, and luxury sneaker brand Golden Goose Group SpA launching a Milan IPO.

Overall, market volatility and uncertainty persist as investors navigate changing monetary policy expectations and global economic developments.