Market Snapshot: Nasdaq-100 leads U.S. stock futures lower as bond yields rise and Evergrande concerns simmer

What’s driving the market?

Stocks had enjoyed two strong days of gains following the Federal Reserve’s policy meeting on Wednesday, as markets seemed to welcome a delay to the start of tapering and ignored the hawkish undertones of the central bank’s outlook. But a delayed taper tantrum appeared to show up for bonds on Thursday, as yields shot higher and remained elevated on Friday.

“Something has clearly changed and positioning on rates is shifting. U.S. 10yr yields jumped to 1.44%, posting their biggest one-day gain since March, whilst 30yr bond yields jumped the most in a single day since March 2020,” said Neil Wilson, chief market analyst for Markets.com. Thursday also saw several global central banks meet, with rate hikes out of Norway and Turkey.

“Although the Fed and BoE remain fairly cautious and the dogma of transitory inflation persists, they’re starting to move beyond pandemic-era emergency mode. Investors see this and are moving too — rates steepening again as they did earlier this year,” said Wilson.

Major indexes were holding on to slim weekly gains, in a week that began with sharp losses linked to fears over global contagion from troubles surrounding property group China Evergrande.

As of Thursday, bondholders still hadn’t received any money from China Evergrande
3333,
-11.61%,
which was due to make a $83.5 million interest payment on dollar bonds, The Wall Street Journal reported, citing sources.

The company has a 30-day grace period to make a payment, but barring that, Evergrande could trigger a default. Those shares fell 12% in Hong Kong on Friday. Elsewhere, media reports said Friday that the company’s electric-vehicle unit hadn’t paid suppliers in months, with employees also receiving no salary for September.

Elsewhere, Friday’s data calendar is light with August new home sales due at 10 a.m. Eastern. At the same time, Federal Reserve Chair Jerome Powell is due to give opening remarks at Fed Listens event “Perspectives on the pandemic recovery,” and Kansas City Fed President Esther George will discuss the outlook for economy and monetary policy at an American Enterprise Institute conference.

Cleveland Fed President Loretta Mester will speak to the Ohio Bankers League conference at 8:45 a.m. Eastern.

Which companies are in focus?

• Shares of Nike Inc.
  NKE,
  +1.36%
  fell 4% in premarket trading after the sportswear maker reported quarterly sales that fell short of Wall Street expectations, and said wages and overhead expenses weighed on revenue.

• Costco Wholesale Corp.
  COST,
  +0.10%
  shares rose modestly as the retailer topped $60 billion in net sales in a single quarter for the first time, hit $5 billion in annual profit and grew at its fastest pace in more than 20 years.

How are other assets trading?

• The yield on the 10-year Treasury note
  TMUBMUSD10Y,
  1.408%
  rose 2 basis points to 1.428%.

• The ICE U.S. Dollar Index
  DXY,
  -0.32%,
  a measure of the currency against a basket of rivals, fell 0.3% to 93.15.

• Oil futures were steady, with the U.S. benchmark
  CL00,
  +0.05%
  barely higher at $73.34 a barrel. Gold futures
  GC00,
  +0.33%
  rose 0.2% to $1,754 an ounce.

• In Asia, Hong Kong’s Hang Seng Index
  HSI,
  -1.30%
  dropped 1.3%, while China’s CSI 300 index
  000300,
  -0.08%
  finished unchanged. The Nikkei 225 index
  NIK,
  +2.06%
  jumped 2%.

• In Europe, the Stoxx Europe 600
  SXXP,
  -0.81%
  was ready to break with three straight days of gains, down 0.6%, while the FTSE 100 index
  UKX,
  -0.23%
  slipped 0.2%.