US pre-open: Stocks seen muted amid geopolitical tensions; bond yields in focus
US futures pointed to a muted open on Wall Street on Wednesday as investors keep an eye on bond yields, with geopolitical concerns set to weigh on sentiment.
At 1145 BST, Dow Jones Industrial Average futures were down 0.1%, while S&P 500 and Nasdaq futures were flat.
Stocks ended lower on Tuesday as the yield on the 10-year Treasury note crept back above 3% to its highest point since 2011.
Rabobank said: "Though the Fed’s Williams’ reiterated his stance as regards the need for three to four rate hikes from the Fed this year, the move looks to have been prompted by a firm retail sales print for April (+0.3%) while March figures were revised to show growth of 0.8%."
It added that the joint probability of a September and a December hike is now around 50%, higher than it has ever been this year.
Craig Erlam, chief market analyst at Oanda, said: "There’s plenty more data to come today which may further lift expectations including housing starts, building permits, capacity utilisation and industrial production. The dollar is making gains again early in the session having pared gains late last week and has already set a new high for the year so far, ahead of the figures."
Housing starts and building permits are at 1330 BST, while industrial production and capacity utilisation are at 1415 BST.
Investors will also be mulling over news that North Korea has suspended talks with South Korea over the continuation of military drills with the US, and threatened to pull out of a planned summit with the US if it continues to pressure it to unilaterally abandon its nuclear weapons programme.
In corporate news, department store chain Macy's is likely to be in focus as it's due to report earnings before the opening bell, while Cisco Systems is slated to report after the close of markets.
Market participants will also eye the release of the latest crude inventories figures from the EIA at 1530 BST, after OPEC published data showing that inventories in OECD countries had dropped to 9m barrels above the five-year average from 340m at the start of last year.
Erlam said: "A drawdown of around three quarters of a million barrels is expected to be reported today although API reported their figures on Tuesday and they indicated that stockpiles actually rose by 4.854m barrels. A similar reading from EIA today could relieve some of the upward pressure on prices and trigger some near-term profit taking."