S&P 500 Futures Show No Signs of Recovery, Extend Three-Month Low

Monday morning witnessed a shift in U.S. stock futures‘ fortunes as they relinquished their early gains. Here’s a concise breakdown of the events:

• Dow Jones Industrial Average futures (YM00, -0.28%) dipped by 28 points, marking a 0.1% decline to 34,204.
• S&P 500 futures (ES00, -0.37%) saw a 0.1% drop, translating to a 5-point decline to 4,356.
• Nasdaq 100 futures (NQ00, -0.45%) experienced a 0.2% decrease, shedding 27 points to 14,842.

To recap Friday’s performance, the Dow Jones Industrial Average (DJIA) recorded a loss of 107 points, equating to a 0.31% decline, landing at 33,964. The S&P 500 (SPX) also experienced a decline of 10 points, equivalent to a 0.23% drop, reaching 4,320, while the Nasdaq Composite (COMP) registered a 12-point fall, or 0.09%, closing at 13,212.

Last week painted a bleak picture for the S&P 500, as it recorded a 2.9% decrease, marking its worst week since the period ending March 10 and hitting its lowest level since June 9.

Monday’s market lacked significant catalysts; however, the tentative resolution of a writers’ strike provided a boost to media companies like Paramount Global (PARA, -4.96%) and Netflix (NFLX, -1.13%) during premarket trading. Additionally, President Joe Biden announced plans to show support for the United Auto Workers strike against the Big Three automakers during his visit to Michigan.

Nonetheless, the primary narrative in recent times has been the rapid ascent of long-term interest rates. Technical strategists at Bank of America noted that while they lack conclusive evidence that the upward movement in the 10-year yield is complete, it is beginning to appear stretched.

The yield on the 10-year Treasury (BX:TMUBMUSD10Y) increased by 5 basis points to 4.49%.

China’s housing crisis returned to the spotlight, with Evergrande (3333, -21.82%) shares plummeting as the company abandoned a $35 billion debt restructuring plan. Additionally, shares of China Aoyuan Group experienced a sharp decline on Monday, marking their first day of trading in over a year. In Hong Kong trade, the Hang Seng (HK:HSI) skidded 1.8%.