Single-stock futures on the S&P 500 index showed little change as this Friday rolls in. The market has just finished off an 8-day winning streak, its longest one in many years. Notably, the main cause may be bond yields reaching new heights, triggering a market sell-off.
S&P 500 futures crawled up by 0.09%, at the same time as Nasdaq 100 futures actually fell by 0.07%. Meanwhile, Dow Jones futures managed to rise by 0.17%. Overall, then, it seems like the movement for hot futures markets was mostly sideways.
Thursday showed a different picture, however, as it ended this strong streak. The S&P 500 dropped by 0.80%, with the Nasdaq dropping by 0.90% over the course of the day. The Nasdaq’s streak was even greater, in fact, and had lasted 9 days until yesterday’s decline. The Dow Jones index fell similarly, by around 0.70%.
Stock Market Streak Ends: Fed Statements and Bond Futures Impact
The main reason for the end of this streak was a stock sell-off. The Fed set off the debacle with its recent statements, saying it was not confident that it had done enough to lower inflation. The Fed Chair, Jerome Powell, stated that their aim is to bring inflation down to 2 per cent over time. So far, he believes their actions have not been enough to ensure this outcome. Therefore, bond yields moved up in anticipation of higher interest rates. This would, therefore, also have implications for bond futures in the markets.
As some analysts have suggested, bond markets usually have a more accurate view of interest rates than stock markets. So far, they are expecting rates to stay higher for a longer period of time. Some have even suggested rates could stay high until the start of 2025. In the future, they are expecting further losses for the S&P 500 and Dow, losing around 0.3% and 0.5% each. We will have to wait to see how this affects single-stock futures in the days ahead.
