S&P 500, Nasdaq futures slip as yields stay high, Tesla slides

[March 02, 2023]  (Reuters) - Futures tracking the S&P 500 and Nasdaq fell on Thursday as the 10-year Treasury yield held above 4% on bets of tighter monetary policy for a longer period, while Tesla sank after it gave few details about its much-awaited affordable electric vehicle.

After a weak performance in February, Wall Street indexes began March on a volatile note as fresh evidence of persistent price pressures and comments from Federal Reserve policymakers fueled worries about the U.S. central bank staying hawkish for longer.

The yield on 10-year Treasury notes - the benchmark for global borrowing costs - raced further above the 4% level on Thursday to touch a fresh four-month high of 4.046%.

Meanwhile, the 2-year yield eased slightly from 15-year highs hit earlier in the session.

A Labor Department report at 8:30 a.m. ET is expected to show initial jobless claims rose to 195,000 in the week ended Feb. 25, after it climbed to 192,000 in the previous week.

The benchmark S&P 500 and the tech-heavy Nasdaq fell on Wednesday after data showed U.S. manufacturing contracted for a fourth straight month in February, although raw material prices increased last month.

Traders of futures tied to the Fed's policy rate saw about an even chance that the rate will get to a range of 5.5%-5.75% by September, from the current range of 4.5% to 4.75%.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., February 17, 2023. REUTERS/Brendan McDermid

U.S. monthly payrolls and consumer prices data in the coming days will further help investors gauge the path of rates heading into the Fed's March 21-22 meeting, at which it is currently expected to raise rates by 25 basis points.

At 07:06 a.m. ET, Dow e-minis were up 67 points, or 0.2%, S&P 500 e-minis were down 14.5 points, or 0.37%, and Nasdaq 100 e-minis were down 61.75 points, or 0.52%.

Tesla Inc fell 5.8% in premarket trading after the investor day event during which Chief Executive Elon Musk gave little details on when it will unveil a much-awaited affordable electric vehicle.

Salesforce Inc soared 15.6% after the cloud-based software firm forecast first-quarter revenue above analysts' estimates and doubled its share repurchase to $20 billion. Meanwhile, Reuters reported that activist investor Elliott Management has nominated candidates to Salesforce's board.

Silvergate Capital slumped 31.3% after the cryptocurrency-focused lender delayed its annual report and said it was evaluating its ability to operate as a going concern.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza)

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