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Saturday, October 1, 2022

Stocks are falling as Treasury yields reach new highs

In premarket trading, technology stocks are falling

  • In premarket trading, S&P500 futures are losing ground as rising Treasury yields put pressure on tech stocks.
  • Nasdaq futures are down around 1% ahead of the market open at the time of publishing.
  • The Yield on 10-year Treasuries attempted to rise above 1.77% recently before falling down to 1.75%.
  • Bond dealers are also worried about increasing inflation, so they are selling US government bonds, driving up yields.

In recent trading sessions, stock traders have largely ignored rising yields, but new highs have sparked their interest.

If Treasury yields continue to rise, tech stocks will face increased pressure, which will be negative for the S&P500.

Precious metals are under pressure due to high yields and a stronger dollar

Higher Treasury yields improved the value of the US dollar, which increased against a basket of currencies.

For precious metals, a combination of higher yields and a stronger dollar acted as a major bearish trigger, putting them under significant pressure.

  • Gold has dropped below $1700 and is heading for March lows around $1675.
  • Meanwhile, silver is attempting to settle below the $24.20 support mark.

As a result, the start of the trading session for gold and silver miners would be difficult.

Gold has been under significant selling pressure since the beginning of the year, and all attempts to gain sustained upside momentum have failed.

As the Suez Canal reopens, WTI oil prices sink below $61

WTI oil sank below the $61 mark as ships began to travel openly along with one of the world’s busiest trade routes.

Traders’ attention is now focused on the upcoming OPEC+ conference, which is set to take place on April 1.

OPEC+ members are likely to expand current output cuts to help the economy, but markets will closely monitor all aspects of the talks.

Many members of OPEC+ want to generate more oil at higher prices to help their budgets recover from the coronavirus pandemic.

OPEC+, on the other hand, does not want to ease supply curbs too fast because demand remains fragile and oil could easily fall below $50.

The oil market is likely to remain volatile in the coming trading sessions as traders respond to any news about the OPEC+ talks.

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