US pre-open: Futures mixed as Treasury yields continue to rise

Wall Street futures were mixed ahead of the opening bell on Thursday as Treasury yields continued to rise.

As of 1245 GMT, Dow Jones futures were up 0.19%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.38% and 0.56% lower, respectively.

The Dow closed 5.14 points lower on Wednesday, narrowly avoiding extending losses recorded in the previous session as investors digested a number of macro points.

Market participants were zeroed in on rates prior to the open, with the benchmark 10-year note trading at 4.035% and the 2-year note reaching 4.90% - a level not seen in over ten years. Both the rise in bond yields and fears of a potentially larger-than-expected interest rate hike from the Federal Reserve have weighed on the early 2023 rally in the last few days.

Swissquote's Ipek Ozkardeskaya said: "A slowing economic growth is not bad news for the Federal Reserve, but the mounting price pressure is. This is what the ISM report revealed yesterday.

"Fed's Neel Kashkari, who was once one of the most dovish Fed members, said that he may back a 50bp at this month's FOMC meeting, while Raphael Bostic said that the Fed should hike the rates to 5-5.25% territory, and keep them there until next year. Activity on Fed funds futures now gives more than 30% chance for a 50bp hike at the next meeting, and Fed swaps price in a peak Fed rate of around 5.5%. This number was around 4.9% at the start of the year."

On the macro front, weekly jobless claims data will be published at 1330 GMT, while Federal Reserve Bank of St Louis president Christopher Waller will deliver a speech at 2100 GMT.

In the corporate space, retailer Macy's smashed expectations with its holiday-quarter earnings but warned of a choppier year ahead.

Still to come, Hewlett Packard, Victoria's Secret, and Dell Technologies will all report earnings after the close.

Reporting by Iain Gilbert at Sharecast.com