Futures muted as bond yields rise

[April 08, 2024]  (Reuters) - U.S. stock index futures were flat on Monday as Treasury yields rose on rising bets that the U.S. Federal Reserve could delay interest rate cuts this year.

Hawkish commentary from Fed officials throughout last week and stronger-than-expected manufacturing and jobs reports pointed to a resilient U.S. economy, taking pressure off the Fed to cut interest rates quickly.

A screen displays the Dow Jones Industrial Average after the close of trading for the day on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 20, 2024. REUTERS/Brendan McDermid/file photo

Wall Street's main indexes recorded weekly losses on Friday as traders scaled back expectations of the Fed cutting rates in June. They now see a 48% chance of the first rate cut in June, as per the CME FedWatch Tool, down from about 58% seen at the start of last week.

The market has also pared back expectations for rate cuts to fewer than three this year, from three to four a few weeks ago, according to LSEG data.

The yield on 10-year notes rose 4.45% to its highest level since November, pressuring equities. [US/]

Investors will be watching for comments from Chicago Fed President Austan Goolsbee and his Minneapolis counterpart Neel Kashkari later in the day.

The focus will also be on the March reading of U.S. consumer price inflation (CPI), due later in the week, that is expected to show a rise in headline inflation to 3.4% year-on-year from 3.2% in Feb.

Also on the radar would be the release of minutes from the Fed's latest meeting, where it stuck to its guidance of three rate cuts this year.

First-quarter earnings season will pick up pace this week, with banking giants JPMorgan Chase & Co, Citigroup and Wells Fargo & Co scheduled to report in the back-end of the week.

Asset manager BlackRock and Delta Air Lines will also report their quarterly numbers this week.

At 5:38 a.m. ET, Dow e-minis were down 19 points, or 0.05%, S&P 500 e-minis were down 4.75 points, or 0.09%, and Nasdaq 100 e-minis were down 9.25 points, or 0.05%.

Tesla jumped 3.4% in trading before the bell after CEO Elon Musk said the company will unveil Robotaxi on Aug. 8.

Cryptocurrency and blockchain-related stocks advanced tracking rising bitcoin prices. Exchange operator Coinbase Global, crypto miner Marathon Digital and software firm MicroStrategy added between 5.7% - 11.9%.

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co (TSMC) gained 1.3% after the U.S. Commerce Department said it would award the company's U.S. unit a $6.6 billion subsidy for advanced semiconductor production in Phoenix, Arizona.

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Anil D'Silva)

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