US open: Mixed trading at the open as bond yields continue their ascent
Wall Street trading got off to a mixed start on Tuesday as bond yields resumed their march higher.
As of 1535 BST, the Dow Jones was down 0.18% to 26,440.16, while the S&P 500 was trading 0.05% higher at 2,885.81 as the Nasdaq jumped ahead 0.19% to 7,750.66.
Meanwhile, the yield on the benchmark 10-year US Treasury note jumped to a new seven-year high above 3.25%.
"Rising rates are a double whammy for stocks - higher corporate debt costs, a lower premium to hold riskier assets against safe-haven Treasuries," said Neil Wilson, chief market analyst at Markets.com.
"The question is do rates rise further from here? A confluence of factors mean US yields could continue to climb with the Fed tightening for longer, its balance sheet being reduced and a huge issuance of debt to fund the tax cuts in the US. But if anything, the US economy just looks stronger and stronger and this yield story is not a reflection of fears of it being a bubble, but of greater confidence in growth."
Over in Europe, the yield on Italy's 10-year government bond hit a new four-and-a-half year high of 3.63% as finance minister Giovanni Tria gave a downbeat assessment to parliament of the country's fiscal outlook and said he wanted to have constructive talks with the EU after the European Commission said it was concerned about Italy's budget plans.
In corporate news, the White House made a rare exception on Tuesday as the administration was beginning to take steps towards its next set of sanctions on Tehran.
Trump's waiver extension will allow Serica to complete its acquisition of BP's stake in three fields in the region - the Rhum, Bruce and Keith fields - the first of which is half owned by Iranian Oil Company, a subsidiary of the national oil company.
US sanctions on Tehran, set to come into effect on 4 November, block US firms and citizens from doing business with Iranian companies.
Elsewhere, Pinnacle Foods inched ahead 0.41% despite the company's third-quarter sales outlook falling short of expectations.
Alphabet dipped 0.48% following a Wall Street Journal report that Google exposed the private data of thousands of users of the Google+ social network, found out about it and then decided to say nothing.
Pyxus International soared 26% in early trade, following on from its 59% gain in the previous session.
On the data front, the National Federation of Independent Business's small business optimism index fell to 107.9 in September from 108.8 the month before, missing expectations for a reading of 108.3.
Still, Pantheon Macroeconomics said this was "a trivial dip", leaving the index still very elevated.
"We'd be surprised to see further declines in the near-term, given the rapid pace of economic growth and the need to renew the ageing capital stock."
"The message is straightforward; labour demand is very strong, but people are becoming very difficult to find, and labour cost pressures are intensifying."