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US STOCKS-Futures slide as investors bet on no Fed rate cuts in 2025; yields climb
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US STOCKS-Futures slide as investors bet on no Fed rate cuts in 2025; yields climb
Jan 13, 2025 3:47 AM

(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

*

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.

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