On Tuesday, US stock index futures saw a slight decline, influenced by the rising Treasury yields. This comes as investors keep a watchful eye on the unfolding tensions in the Middle East, turning their focus towards corporate earnings to assess the economic landscape's resilience.
The previous trading session ended on a lower note for Wall Street, driven by an uptick in Treasury yields and growing concerns over the escalating conflict between Iran and Israel.
The 10-year government bond yield was recorded at 4.6468%, following a report that showed an unexpected surge in US retail sales in March, highlighting a robust end to the first quarter for the economy, particularly with a significant increase in online shopping receipts.
In Israel, citizens are on edge, awaiting Prime Minister Benjamin Netanyahu's response to Iran's unprecedented direct assault. The international community calls for moderation, fearing further escalation of the conflict.
Investors are also keenly awaiting remarks from several policymakers, including Federal Reserve Chair Jerome Powell, for insights into the central bank's stance on policy adjustments.
San Francisco Fed President Mary Daly remarked on Monday that given the strength of the economy and the labor market, coupled with inflation rates still above the Fed's 2% goal, there's no immediate need to lower US interest rates.
The probability of the Federal Reserve initiating its easing cycle in July is currently seen at around 48%, according to the CME FedWatch tool.
Attention is also turning to the earnings reports from major financial institutions like Bank of America (BAC, Financial), Morgan Stanley (MS, Financial), and BNY Mellon (BK, Financial), all scheduled to release their quarterly results before the market opens. Pharmaceutical giant Johnson & Johnson (JNJ, Financial) is also expected to announce its earnings ahead of the market opening.
US equities have experienced a downturn recently as investors recalibrate their expectations for Federal Reserve rate cuts this year, with current predictions showing only 43 basis points of easing, a sharp decline from the 150 basis points anticipated at the year's start, according to LSEG data.
As of 5:38 a.m. ET, Dow e-minis were down by 72 points, or 0.19%, S&P 500 e-minis dropped by 8.75 points, or 0.17%, and Nasdaq 100 e-minis decreased by 20.75 points, or 0.12%.
Tesla (TSLA, Financial) experienced a 2.1% decline in premarket trading after a more than 5% fall in the previous session, following a report that the electric vehicle manufacturer is cutting over 10% of its global workforce.
