US pre-open: Stocks to fall amid inflation woes
US stock futures pointed to a weaker open on Wall Street on Tuesday amid concerns about surging inflation and economic growth, with the 10-year Treasury yield holding above 3%.
At 1110 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.5%, while Nasdaq futures were 0.6% lower.
Investors will be digesting a bigger-than-expected rate hike by the Reserve Bank of Australia. The Bank lifted rates by 50 basis points to 0.85% as it looks to curb inflation. Analysts had been expecting a 25 bps hike.
Neil Wilson, chief market analyst at Markets.com, said: "The move has just poured a bit of cold water on yesterday’s risk-on mood, which had already cooled somewhat following the rise in US bond yields last night as the 10-year Treasury climbed back above 3% to its highest level in a month.”
Wilson added: "Whether higher bond yields have as much of a marginal impact on equities as they did a few weeks ago is up for debate - the market has seen 3% already and come back to it.
"We know rates are rising near-term so the question is one of whether the stock market has adjusted to this yet. On that front, the real uncertainty lies in earnings and whether inflation has peaked - US CPI later this week is important on that front."
On Tuesday’s macroeconomic calendar, trade data for April is due at 1330 BST.
On the corporate front, Kohl’s was set to be in focus as it confirmed it is in exclusive negotiations with retail holding company Franchise Group about a possible takeover that would value the US department store chain at around $8bn.
Results are due from JM Smucker, United Natural Foods and Casey’s General Stores.