May 8 (Reuters) – U.S. stock index futures were set for a lower open on Wednesday following a weak forecast from Uber and a rebound in bond yields as investors sought more clarity on the Federal Reserve’s plans for interest rate cuts.
Uber (UBER.N), opens new tab lost 7% premarket after the ride-hailing platform forecast second-quarter gross bookings below expectations.
Megacap stocks also fell, with Tesla (TSLA.O), opens new tab, Amazon.com (AMZN.O), opens new tab and Alphabet (GOOGL.O), opens new tab down between 0.6% and 1.7%, following a rise in the 10-year Treasury yield after five days of declines.
This comes after the S&P 500 (.SPX), opens new tab closed higher for a fourth straight session on Tuesday, its best winning run since March, while the blue-chip Dow (.DJI), opens new tab scored a fifth session of gain in its longest positive run since December 2023.
Investors found reassurance in upbeat earnings and a softer labor market report, boosting markets in May. Concerns about prolonged interest rates eased.
“The market has now priced in the Fed’s move for the rest of the year, so the reaction function will be lower moving forward and investors will start to focus more on the economic and earnings backdrop,” said Dylan Kremer, chief investment officer at Certuity.
“The bond yields aren’t necessarily reflecting the expected Fed activity..and that’s primarily due to still resilient growth.”
Moreover, market reactions to bond yield movements can vary based on factors such as inflation expectations and central bank policies. Therefore, understanding the dynamics of Wall St bond yields is crucial for investors navigating the complexities of the financial markets.
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