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Futures off: Dow 0.32%, S&P 500 0.79%, Nasdaq 1.21%
Jan 13 (Reuters) - U.S. stock index futures fell on
Monday as yields surged after robust payroll numbers released
the previous week spurred bets that the Federal Reserve will
maintain a hawkish stance for most of 2025.
At 05:44 a.m. ET, Dow E-minis were down 133 points,
or 0.32%, S&P 500 E-minis were down 46.25 points, or
0.79%, and Nasdaq 100 E-minis were down 255.25 points,
or 1.21%.
Futures tracking the domestically sensitive Russell 2000
index declined 1.1% to their lowest since September
2024. The index had fallen more than 2% into correction
territory on Friday, from the intraday high it touched in late
November.
Wall Street's main indexes logged their second consecutive
week of declines in the previous session after multiple
better-than-expected reports, including one on employment and
another on services activity, raised expectations that inflation
could be running high in the world's largest economy.
Investors also priced in the likelihood that the incoming
Donald Trump government's policies - such as tariffs and a
clampdown on illegal immigration - could threaten global trade
and fuel price pressures at a time when the U.S. Federal Reserve
has also signaled a cloudy outlook for monetary policy. Trump is
expected to take office on Jan. 20.
After an initial spike, yields on longer-dated Treasury
bonds are pinned at their highest levels
since late 2024.
Data compiled by LSEG showed traders were no longer fully
pricing in even one rate cut by the Fed this year, with futures
reflecting just 23.6 basis points worth of cuts by December this
year.
The Consumer Price Index figure and the central bank's Beige
Book on economic activity, both due on Wednesday, could help
investors gauge the central bank's policy outlook.
The risk-off stance hit megacaps, which have led much of the
rally in U.S. stocks over the past two years. Tesla
slid 2.5%, Amazon.com ( AMZN ) dropped 1.2% and Alphabet
lost 1% in premarket trading.
Chip stocks such as Nvidia ( NVDA ) dropped 3%, Advanced
Micro Devices ( AMD ) fell 1.6% and Broadcom ( AVGO ) lost 2.9%
as investors braced for new export restrictions by the Joe Biden
administration, expected later in the day.
Against the backdrop of equity valuations that are high
above long-term averages, quarterly reports from companies will
take center stage later this week.
Major lenders JPMorgan Chase & Co ( JPM ), Wells Fargo ( WFC )
, Goldman Sachs ( GS ) and Citigroup ( C/PN ) are due to
report on Wednesday. Shares of the banks were down nearly 1% in
light premarket trading.
Among others, oil stocks rose. As SLB added 1%,
Occidental Petroleum ( OXY ) was up 1.1% and Chevron ( CVX )
climbed 0.9%, tracking higher crude prices driven by wider U.S.
sanctions on Russian oil.