U.S. stock futures are under pressure as stocks head toward a losing week and after an earnings warning from FedEx (more below).
The three major averages are on pace to post their fourth losing week in five, with the Dow down 3.7% this week, while the S&P 500 is 4% lower. The Nasdaq is down 4.6% for the week so far, heading toward its worst weekly loss since June. Yesterday, the Dow fell 0.5%, the S&P 500 lost 1.1%, and the Nasdaq dropped 1.4% as tech stocks led markets lower.
Treasury yields rose, with the two-year Treasury note hitting fresh 15-year highs, after data on retail sales and jobless claims showed a resilient economy that would reinforce the Fed's position to continue aggressively hiking interest rates to cool inflation. The two-year note yield is 3.86%, while the 10-year Treasury note yields 3.47%.
Oil prices fell over 3% to a weekly low as a tentative deal was reached to avert a U.S. rail strike, amid expectations of weaker global demand and continued strength in the U.S. dollar. Light sweet crude is just over $85 per barrel.
In Asia, the Shanghai Composite Index fell 2.3% despite better-than-expected economic data on China's industrial production and retail sales, while the Hang Seng fell 0.9%. In Japan, the Nikkei was down over 1%. In Europe, the Stoxx 600 slid over 1% as the British pound sterling fell to a 37-year low against the dollar.
Cryptocurrency prices are falling as the White House released a new framework for crypto regulation in the U.S. The price of Bitcoin dropped below $20,000, while the price of Ether lost over 7% at $1,470. Shares of Coinbase (COIN) and other crypto-related firms are lower in pre-market trading as well.
Later this morning, the University of Michigan releases its preliminary estimate of its Consumer Sentiment Index for September. The consensus estimate is for a reading of 59.3, about one point higher than August’s reading. The Federal Reserve will likely be closely watching consumer expectations of inflation from the survey.
