U.S. stock-index futures pointed to a lower start for Wall Street Wednesday, following a series of worrying data on global economic growth, and after the yield on the 10-year U.S. Treasury note fell below that of the 2-year note, marking an inversion of the main measure of the yield curve and flashing a recession warning signal.
How are the major benchmarks faring?
Futures for the Dow Jones Industrial Average YMU19, -1.49% fell 406 points, or 1.6%, to 25,904, while those for the S&P 500 ESU19, -1.45% shed 43.5 points, or 1.5%, to 2,887.75. Nasdaq-100 futures NQU19, -1.58%, meanwhile, lost 133.75 points, or 1.7%, to 7,616.75.
Weakness in the futures markets threatens to reverse gains notched on Tuesday, after investors cheered news that the Trump administration would delay the imposition of some new tariffs on Chinese goods, from Sept. 1 to Dec. 15.
On Tuesday, the Dow Jones Industrial Average rose DJIA, +1.44% 372.54 points, or 1.4%, to end at 26,279.91, for the biggest one-day gain in two months. The S&P 500 index SPX, +1.48% added 42.57 points, or 1.5%, to close at 2,926.32. The Nasdaq Composite Index COMP, +1.95% rose 152.95 points, or 2%, to 8,016.36.
What’s driving the market?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -4.90% fell below that of the 2-year U.S. Treasury note TMUBMUSD02Y, -4.38% for the first time in more than a decade early Wednesday as investors digested weak economic data out of China and Germany.
Stock index-futures extended their losses after the spread between the 10-year and 2-year notes briefly turned negative shortly after 6 a.m. Eastern Time, a phenomenon referred to as a yield-curve inversion, because yields on longer-term debt are typically higher than those for short-term bonds. This follows the inversion of the spread between the 10-year note and the