On Wednesday, U.S. stock index futures fell for the third straight session, led by losses in rate-sensitive tech stocks on fears that rising inflation could force the U.S. Federal Reserve to pare back its support soon.
The yield on 10-year Treasury notes touched a one-week high, driving down shares of Apple, Facebook, and Microsoft by about 1% premarket.
Tech and other growth stocks are sensitive to yields as their value rests heavily on earnings years into the future, which are discounted more deeply when expectations of interest rates hikes rise.
Strong inflation readings and signs of a worker shortage in recent weeks have fueled fears of inflation and roiled stock markets, despite reassurances from Fed officials that the rise in prices would be temporary.
Wall Street’s main indexes fell in a late session selloff on Tuesday as weak housing starts data overshadowed better-than-expected earnings from Walmart and Home Depot.
MacDailyNews Take: Again, if you know how, it’s best to get a handle on inflation, while you still can.
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan