Wall Street was pointed to gains early Thursday as investors waited for more corporate earnings reports for clues about how businesses and consumers are handling persistently high inflation for four decades.
Dow Jones Industrial Average futures rose 0.3% and S&P 500 futures gained less than 0.1%.
After big gains at the start of the week, Wall Street retreated as investors scrutinized earnings and Treasury yields hit multi-year highs.
“Rising US yields and the strength of the US dollar are the hammers driving global equities lower,” Stephen Innes of SPI Asset Management said in a report.
The 10-year Treasury yield, which influences mortgage rates, climbed to 4.13%, its highest level since June 2008. It was at 4.02% on Tuesday evening.
The two-year Treasury yield, which meets expectations for future Fed action, fell to 4.58% from 4.43%.
The Fed and central banks in Europe and Asia have raised interest rates to quell inflation, which is at its highest in several decades. Investors fear tipping the global economy into recession.
Inflation in Britain hit a 40-year high of 10.1% year on year earlier in September.
Markets in Europe and Asia were mixed as the British PM faced demands to resign and Japan reported its 14th consecutive monthly trade deficit.
British Prime Minister Liz Truss has had to resign following chaotic scenes in Parliament during a vote on a ban on fracking. Truss was defiant despite financial market turmoil caused by multiple policy reversals.
Truss “precipitated this political crisis by triggering the market crisis,” Rabobank’s Michael Every said in a report. Britain is “deep in the emerging market rut”.
At midday, the FTSE 100 in London rose 0.1%, the DAX in Frankfurt fell 0.3% and the CAC 40 in Paris rose 0.4%.
In Asia, the Nikkei 225 in Tokyo fell 0.9% to 27,006.96 after September imports soared 46% from a year earlier due to soaring oil prices and the weakness of the yen. The Japanese currency is trading at its lowest level in 32 years against the dollar.
The yen gained slightly against the dollar, at 149.79 against 149.81 yen on Wednesday.
The dollar gained against other currencies following repeated increases in interest rates by the Federal Reserve, which increases the return on assets valued in dollars. Investors also see the US currency as a stable haven amid global uncertainty.
The Shanghai Composite Index fell 0.3% to 3,035.05 and the Hang Seng in Hong Kong fell 1.4% to 16,280.22.
Seoul’s Kospi fell 0.9% to 2,218.09 and Sydney’s S&P-ASX 200 fell 1% to 6,730.70.
American Airlines jumped 2.4% in premarket after the company reported third-quarter profit of $483 million, as revenue during a turbulent summer travel season topped highs. before the pandemic.
CEO Robert Isom said travel demand remained strong, and Americans expect fourth-quarter earnings to beat Wall Street expectations and revenue to top the same quarter of 2019 again.
In energy markets, benchmark U.S. crude rose $1.95 to $87.50 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trade, advanced $1.51 to $93.92 a barrel in London.
The euro gained 98.08 cents against 97.68 cents on Wednesday.
On Wednesday, the S&P fell 0.7%, snapping two days of gains. The Dow Jones slid 0.3% and the Nasdaq composite fell 0.9%.
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Kurtenbach reported from Bangkok; Ott reported from Washington.