Premarket: U.S. 10 year yield back near 5% puts more pressure on stocks

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Markets await ECB rate announcement, release of U.S. GDP data

U.S Treasury yields were heading back towards 5% on Thursday, dragging shares around the world to multi-month lows in the middle of a busy week for corporate earnings, with an ECB meeting and the release of U.S. GDP to come later in the day.

“The Treasury market is clearly very much top of mind, the big back up in yields yesterday appeared to have quite a negative impact on equities as well, so how that evolves and how it reacts to data we have this week will be the big swing factor for global markets,” said Kiran Ganesh global head of investment communications at UBS Wealth Management.

U.S. Nasdaq futures were down 1.2% and S&P 500 futures off 0.7%, even after all three main U.S. Benchmarks had closed Wednesday sharply lower.“Clearly high yields are reflecting concerns that rates will have to stay high for longer, and that won’t be good for the economy longer term, high yields are also competing for equity market investment, and the start of the earnings season has been a mixed bag, but generally on the negative side.

Alphabet shares logged their worst session since March 2020 overnight, dropping 9.5% as investors were disappointed with stalling growth in its cloud division.

 

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