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US futures slip, bond yields rise as rate-cut bets cool

US stock futures slid on Wednesday as bond yields rose, as optimism for fast interest-rate cuts waned ahead of fresh jobs data and the release of Federal Reserve meeting minutes.

Futures on the Dow Jones Industrial Average (^DJI) and the benchmark S&P 500 (^GSPC) both fell about 0.3%. Futures on the Nasdaq 100 (^NDX) dropped roughly 0.5% after a bruising session that saw tech stocks shed almost 1.6%.

Hopes that the year-end market rally would roll on into 2024 took a battering on Tuesday as stock indexes and bond prices sank in tandem for their worst start to a year in decades. Bonds are headed lower for a fourth day, pushing the 10-year Treasury yield (^TNX) up near 4%.

Traders have started pulling back on bets on Fed interest-rate cuts, with 74% now pricing in a March pivot, compared with 89% a week ago, per the CME FedWatch Tool.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

Minutes of the Fed’s December meeting due later could give a window into how near officials think they are to easing up on tightening, so they can nail a “soft landing” for the economy.

Eyes will also be on the JOLTS report on job openings, given the unexpected resilience of the labor market has fed into expectations of a Fed shift. Wednesday’s data will set expectations for the December US monthly jobs report coming Friday.

Live1 update

  • Labor market comes into focus

    After a rough first day of trading, investor attention on Wednesday will turn to the labor market with the monthly update on job openings and turnover — known as the JOLTS report — set for release at 10:00 a.m. ET.

    A decline in job openings throughout 2023 served as an early indicator the US labor market was slowing, and Wednesday’s data will serve as a key table-setter ahead of Friday’s December jobs report.

    Expectations are Wednesday’s report will show there 8.85 million jobs open at the end of November.

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