Wall Street extended losses as risk-off continued to dominate the market movements, with the VIX spiking 11% to above 21 for the first time since May. The US 10-year bond yields jumped 8 basis points to 4.98% following Fed Chair Powell’s speech. The Fed boss signalled another possible rate hike if the economy proves further resilience but will approach carefully. However, Fed funds futures contracts priced in little chance for another rate hike within this year as the 2-year Treasury yield fell 6 basis points, sending the US dollar lower.
The US tech earnings are painting a mixed picture so far. Tesla’s shares shed 10% following CEO Elon Musk’s disappointing comments on the Cybertruck’s delivery, while Netflix soared 17% on the surprising jump in the net subscriber growth. However, the tech home, Nasdaq, posted a three-day losing streak due to the macro headwinds.
In commodities, the Hamas-Israel war lifted gold and oil further amid the geopolitical tensions. The Comex gold futures were up 1% to a two-month high of nearly US$1990 per ounce, and the Nymex WTI futures jumped 2.4% to above US$90 per barrel, putting upside pressure on inflation.
Spiking US bond yields may continue to press equity markets in the Asia-Pacific region as futures point to a lower open. The Nikkei 225 futures fell 0.51%, the ASX 200 futures slumped 0.83%, and Hang Seng Index futures were down 0.18%.
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