US open: Stocks on the back foot as Treasury yields grind higher

US stocks were trading on the back foot on Thursday as the central bank's 'hawkish pause' the night before percolated through financial markets.

Economic projections submitted by the Federal Reserve's top official on Wednesday pointed to up two more interest rate hikes before 2023 was out and a slightly higher level for rates at the end of the following year.

Some economists were of the opinion that those projections would likely end up being proved too conservative, but for now the Treasury market was coming under renewed pressure as a result.

As of 1619 BST, the Dow Jones Industrials was slipping 0.54% to or 185.50 points to 34,255.89, alongside a 1.03% or 45.32 point decline for the S&P 500 to 4,356.88.

Volatility also picked up a bit alongside, with the CBOE's VIX index climbing 7.53% to 16.28.

In parallel, the yield on the benchmark 10-year U.S. Treasury note was climbing by seven basis points to 4.479%.

Nevertheless, Neil Wilson from Markets.com said: "The Fed is not convinced it’s done but it probably is. This is about optionality rather than desire. Rates are already plenty restrictive. and it would require a change in the outlook for inflation’s stickiness before November to push into another hike."

US data released on Thursday was mixed, at least on the surface.

According to Labor, initial unemployment claims fell by 21,000 over the week ending on 16 September to reach 201,000 (225,000).

However, Ian Shepherdson at Pantheon Macroeconomics pointed out that WARN notices of mass layoffs from companies were thus far signalling a rebound "in due course".

The Philly Fed's regional factory index fell from a reading of 12.0 in August to -13.5 for September (consensus: -1.0).

Existing home sales meanwhile were reported as down by 0.7% month-on-month to reach 4.04m (consensus: 4.1m), which Shepherdson labelled "as grim with worse to come".

Dow Jones - Risers

Unitedhealth Group Inc. (UNH) $502.11 2.03%
Travelers Company Inc. (TRV) $169.89 0.56%
Microsoft Corp. (MSFT) $322.07 0.40%
Walt Disney Co. (DIS) $82.88 0.38%
Intel Corp. (INTC) $34.81 0.35%
Merck & Co. Inc. (MRK) $107.46 0.14%
Verizon Communications Inc. (VZ) $33.63 0.09%
Dowdupont Inc. (DWDP) $0.00 0.00%
Chevron Corp. (CVX) $166.48 -0.13%
Johnson & Johnson (JNJ) $162.41 -0.31%