U.S. equity futures traded mixed on Tuesday, although volumes begin to decline ahead of the Thanksgiving holiday, as investors redefine interest rate expectations in the wake of the president’s ruling Joe Biden to appoint Jerome Powell for a second term as Chairman of the Federal Reserve.
Oil prices were also the center of attention after the White House unveiled plans to release 50 million barrels of crude from the Strategic Oil Reserve — as part of a coordinated move with China, India, South Korea, Japan and the UK – in an effort to contain soaring energy costs.
The appointment of Powell, alongside future Vice President Lael Brainard, has boosted bets on a short-term acceleration of the Fed’s debt reduction strategy, as well as those linked to a rate hike in 2022, facing the fastest domestic inflation rate in more than three decades.
This took the dollar index, which tracks the greenback against a basket of six global currencies, to its highest levels in 16 months, while pushing the yields on the 2-year benchmark note to a high of 0.634% in March 2020 in overnight trading. The CME Group’s FedWatch tool now suggests a 78% chance of a rate hike in June, down from around 65% a week ago.
On Wall Street, futures contracts linked to the Dow Jones Industrial Average show an opening bell gain of 25 points while those linked to the S&P 500 are valued for a downward movement of 2.5 points.
Futures contracts linked to the technology-driven Nasdaq Composite, which fell 1.26% from its all-time high last night, point to a 55 point decline as benchmark T-bill yields at 10 years soared to 1.637% in day-to-day trading.
In the oil markets, WTI futures for January delivery, which are closely tied to U.S. gas prices, were $ 1.3.8 lower from last night’s close at $ 75.38 on barrel immediately after the announcement of the release of SPR.
Brent crude contracts for January, the global benchmark for prices, fell $ 1.02 to a two-month low of $ 78.74 a barrel.
In terms of individual values, Zoom Video Communications (ZM) – Get the Zoom Video Communications (ZM) report fell 9.2% as growth concerns offset higher-than-expected profits in the third quarter and a strong sales outlook for the full year.
Xpeng (XPEV) – Get the Xpeng report shares jumped 3.4% after China-based electric carmaker and newcomer Tesla (TSLA) – Get the Tesla Inc report its rival, posted higher-than-expected profits in the third quarter and said year-end shipments would exceed Street’s forecast.
Best buy (BBY) – Get the report from Best Buy Co., Inc. fell 10.9% after posting higher-than-expected profits in the third quarter, but expected comparable store sales to decline over the holiday season as supply chain disruptions trickle down to the retail electronics industry.
Dollar tree (DLTR) – Get the Dollar Tree, Inc. shares were also down, after posting third-quarter earnings that were broadly in line with Street’s forecast, noting that he planned to roll out price hikes that will take his midpoint to $ 1.25 at the start of the year. next year.
In overseas markets, the European Stoxx 600 fell 0.82% at midday in Frankfurt, pushing the regional benchmark back to a three-week low, amid lingering concerns about rising rates of coronavirus infection and the prospect of tightening monetary policy from the European Central Bank.
In Asia, the region-wide MSCI ex-Japan index was down 0.45% in the session, as stocks followed the massive Wall Street selling last night, while the Nikkei 225 in Tokyo was closed. for the Thanksgiving Holiday of Labor Day.