Stock futures slipped early Monday as investors remained worried about rising Treasury yields and a weak stock market last week. Dow Jones Industrial Average futures fell 18 points, or 0.03%. S&P 500 futures dropped 0.1%. Nasdaq-100 futures fell 0.3%. The moves came after all three major US indexes ended last week lower.
The Dow suffered its second straight weekly decline last week. The Dow fell 0.8% for the week. The S&P 500 dropped 1.4%. The Nasdaq fell 2%.The S&P 500 and Nasdaq ended three weeks of gains, according to CNBC.
Rising Treasury yields
Rising bond yields around the world have become a major pressure point for stocks. The 30-year US Treasury yield moved above 5.3% last week. That was its highest level in nearly 20 years. Higher Treasury yields can make bonds more attractive to investors and can also increase borrowing costs for companies and consumers, putting pressure on stocks.
Treasury yields were not the only rates causing concern. Government bond yields in Japan, France and Germany also climbed to multiyear highs. The rise in yields across major economies has added to concerns about global financial conditions, according to CNBC.
Iran war and oil prices
Investors are also worried that the US-Iran war could last longer than expected. A longer conflict could keep oil prices high. Higher oil prices can push up the cost of fuel, transportation and other goods. That could make inflation harder to control.
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US Treasury move
The US Treasury tried to calm the bond market, but the relief did not last long. Treasury Secretary Scott Bessent announced measures aimed at helping stabilize the long end of the US Treasury yield curve. However, the support for the bond market was short-lived, according to CNBC.
Jefferies said the Treasury’s move could have effects similar to some parts of quantitative easing, although it is not QE, according to CNBC. David Zervos, chief market strategist at Jefferies, said the Treasury’s decision to increase long-end Treasury buybacks was similar to an “Operation Twist.” He said the move was designed to respond to changes in shorter-term market conditions rather than act as traditional quantitative easing.
Zervos also said Treasury buybacks do not create new reserves, meaning they do not have the direct money-creation effect of QE. However, he said the move could leave room for more government spending and create some effects similar to QE, according to CNBC.
PCE inflation data
Investors now have fresh inflation data to watch this week. The key report will be the July Personal Consumption Expenditures, or PCE, price index. The data is due Wednesday. The PCE index is closely watched because it is one of the Federal Reserve’s main measures of inflation.
Fed Jackson Hole meeting
The Federal Reserve’s Jackson Hole meeting will also be closely watched. The Fed will hold its annual symposium in Jackson Hole, Wyoming, this week. Fed Chairman Kevin Warsh is expected to give a speech. Investors will look for clues about the Fed’s thinking on inflation, interest rates and the economy, according to CNBC.
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Nvidia and AI stocks
The artificial intelligence sector could also move markets this week. Nvidia is scheduled to report earnings on Wednesday. Marvell Technology is scheduled to report results on Thursday. Both companies are closely watched because investors are looking for signs of continued demand for AI technology.
Nvidia’s prices could become another concern for investors. Bloomberg News reported over the weekend, citing people familiar with the matter, that Nvidia had told clients that servers using its Vera Rubin and Blackwell chips would face price increases of more than 15%.
Higher prices could affect how much customers pay for AI infrastructure and could become an important issue for investors watching Nvidia’s earnings and outlook.
Asian markets
Asian markets also showed mixed-to-weaker trading on Monday. Japan’s Nikkei 225 closed 0.74% lower. South Korea’s Kospi dropped 3.12%. China’s CSI 300 fell 1.21%. Australia’s S&P/ASX 200 was the exception, rising 0.49%, according to CNBC.
Overall, several concerns are weighing on investors at the start of the week. Rising US Treasury yields are putting pressure on stocks. High global bond yields are adding to the pressure. Investors remain concerned about the impact of a longer US-Iran war on oil prices and inflation.
This week’s US inflation data and the Fed’s Jackson Hole meeting could give investors more clues about interest rates. Nvidia and Marvell earnings will also test whether the AI trade can continue supporting the stock market. That combination of higher yields, inflation worries, geopolitical risks and major earnings is keeping investors cautious. As a result, US stock futures started Monday slightly lower after the major indexes posted losses last week.
