Wall St set to open lower as yields rise ahead of Powell speech

WALL Street was set to open lower on Monday as the 10-year Treasury yield regained 2007 highs, while investors awaited comments from Federal Reserve Chair Jerome Powell and more data this week to gauge the central bank's interest-rate path.

Powell and Philadelphia Fed President Patrick Hasker will speak at a roundtable discussion, due 11 a.m. ET, with local employers and small business owners on efforts to grow the economy.

Later in the day, Cleveland Fed President Loretta Mester will speak on the outlook for the U.S. economy.

Yield on the 10-year Treasury note edged higher on Monday at 4.6371%, touching 16-year highs again, while the yield on the 2-year note, which best reflects interest rate expectations, remained above 5%.

"The Fed has said that their target is still 2% and they are still long ways away from getting inflation really going in the direction that they want," said Russell Hackmann, President of Hackmann Wealth Partners.

"More of a concern for market participants right now is the kind of dislocation in the markets as the treasury market is struggling (recently)."

U.S. stocks ended the July-September period lower to log their first quarterly decline in 2023 as investors grappled with the prospects of interest rates remaining higher for longer amid a recent rally in crude prices fueling inflation concerns.

A slew of economic data including U.S. manufacturing activity, job openings data leading to the crucial monthly jobs report at the end of the week is on investors' radar for more clues on the Fed's interest-rate path.

Traders' bets on the benchmark rate remained unchanged in November and December at nearly 74% and 55%, respectively, according to CME's FedWatch tool, while they have priced in a 25-basis-point rate cut as early as March.

The Congress on Saturday passed a stopgap funding bill with overwhelming Democratic support after Republican House Speaker Kevin McCarthy backed down from an earlier demand by his party's hardliners for a partisan bill.

At 8:18 a.m. ET, Dow e-minis were down 85 points, or 0.25%, S&P 500 e-minis were down 9.25 points, or 0.21%, and Nasdaq 100 e-minis were down 7.25 points, or 0.05%.

Crypto-linked stocks including Riot Platforms, Marathon Digital and U.S.-listed shares of Hut 8 Mining were up between 5.2% and 7.7% in premarket trading after bitcoin hit near two-month highs.

Shares of Coinbase climbed 5.2% after the cryptocurrency exchange got the Singapore payments licence from the city-state's central bank.

Cybersecurity firm Zscaler jumped 2.7%, while cloud security platform Datadog advanced 2.3% after brokerage Piper Sandler upgraded the stocks to "overweight" from "neutral".

Nvidia rose 1.2% on a report saying Goldman Sachs had upgraded the chipmaker's stock to "conviction buy".

Rivian Automotive advanced 2.9% after Evercore ISI raised the EV maker's stock to "outperform" from "in line". - Reuters

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