For the second day U.S. stock index futures were lower on Tuesday, with Dow futures dropping over 150 points, pushed down by the drop of bond yields and decline in Apple.
U.S. Treasury yields rose to more than three-year highs on the optimism surround the idea that the global central banks will lessen stimulus as the economic outlook continues to improve. An increase in yields results in borrowing case becoming more expensive.
The rising yields and Monday’s 2.1 percent drop in Apple brought down the Dow Jones Industrial Average and S&P 500 to their largest one-day percentage drop in nearly five months.
During premarket trading on Tuesday, Apple was down another 1.1 still seeing the effects of news that the company will cut its production of its iPhone X smartphone in half. Apple is due to report results on Thursday.
President Donald Trump’s State of the Union speech will be analyzed for remarks on trade later Tuesday, while the Federal Reserve’s two-day monetary policy meeting also began. Some economists believe that the central bank will raise its economic assessment, which could result in four interest rates hikes this year.
At 6:57 a.m. EST, Dow e-minis were down 163 points, or 0.62 percent, with 49,407 contracts traded. S&P 500 e-minis were down 12.75 points, or 0.45 percent, with 225,518 contracts traded. Nasdaq 100 e-minis were down 33.75 points, or 0.48 percent, on volume of 56,919 contracts.
THE MORNING REPORT
Start your workday the right way with the news that matters most.
The market’s continuous rally this year has also brought on increased worries of a pullback. The CBOE Volatility Index, the most widely followed barometer of expected near-term stock volatility, surpassed 14 for the first time since the beginning of December.
Shares of Harley-Davidson dropped 7.2 percent after last year’s shipments were on the lower end of its estimate and its forecast included a drop in shipments for this year.
MetLife plummeted 8.1 percent in premarket trading following the company stating that the SEC is investigating its failure to pay out some pensions.