S&P 500 futures are losing ground in premarket trading as Treasury yields are trying to settle above recent highs. Tech stocks show that they remain sensitive to higher yields, and Nasdaq futures are losing more than 1% in premarket trading. Big Tech stocks like Apple, Microsoft, Amazon are also down by more than 1% ahead of the opening bell.
Yesterday, U.S. reported that Initial Jobless Claims decreased from 754,000 to 712,000 while Continuing Jobless Claims declined from 4.34 million to 4.14 million. The situation in the job market continued to improve, and traders’ attention shifted to risks of higher inflation.
Unlike ECB which promised to increase the pace of asset purchases to deal with the recent increase in yields, the Fed has not signaled that it was ready to provide more support to the market, which served as a bearish catalyst for Treasuries and pushed yields higher. If Treasury yields move to new highs, stocks may find themselves under more pressure.
Precious Metals Set To Finish The Week On A Weak Note
Gold is currently trying to settle below the support at the $1700 level as a combination of higher Treasury yields and strong dollar puts pressure on precious metals that do not pay interest. Silver is also losing ground and is trying to settle below the support at $25.55.
The continuation of the sell-off in the U.S. government bond market, which is pushing Treasury yields to new highs, will put additional pressure on precious metals as well as mining stocks which have recently started to rebound from lows reached at the beginning of March.
Consumer Confidence Is Projected To Improve
Today, the U.S. will provide the preliminary reading of Consumer Confidence report for March. Analysts project that Consumer Confidence improved from 76.8 in February to 78.5 in March.
This report may have a material impact on markets as strong Consumer Confidence will signal that consumers are ready to spend money. Since $1,400 stimulus checks are coming soon, higher-than-expected Consumer Confidence may be interpreted as a sign of higher inflation in the near future.