The Dow Jones futures tumbled nearly 200 points on the day, indicating that Wall Street’s stock market will drop tonight. Amid concerns about a rebound in US government bond yields.
As of 7:21 p.m. Thai time, the Dow Jones futures were down 177 points or 0.56% to 31,256 points.
Even though the Wall Street stock market is forecast to fall today. But the Dow has jumped more than 5% since the start of this month.
Investors fear a rebound in US Treasury yields will reduce the attractiveness of investing in stocks. And it will affect companies that benefit from low interest rates.
The US 10-year bond is the benchmark bond used to determine the global bond’s price. This includes the mortgage loan interest rates. And US car loan interest rates Which if the government bond yields rise It will give consumers less money to spend. As the cost of paying for the mortgage loan increases. And companies will face higher costs from debt repayment. This will make these companies reduce their investment. And reduce the dividend payment to investors
US government bond yields continue to rebound today. This signaled increasing investor confidence about the recovery of the US economy. Following the progress of vaccination against COVID-19 To the American broad
At 7:11 p.m. ET, the US 10-year government bond yield rebounded to 1.375% while the 30-year government bond yield rose to 2.167%.
The White House said The government expects to complete the delivery of the COVID-19 vaccine. Millions of doses offered to Americans this week. After a winter storm has hindered earlier vaccine delivery.
Federal Reserve Chairman Jerome Powell is due to deliver a semi-annual statement on monetary policy and the state of the economy to Congress this week.
Powell will make a statement to the Senate Banking Committee tomorrow. And to the House of Representatives Financial Services Commission on Wednesday
In the past, according to tradition The Fed chair is scheduled to make statements to Congress twice a year, the first time in February. And again in June or July
Investors keep an eye on Mr Powell’s statement. For signs of economic conditions, inflation rate, US interest rate direction Including the impact of the coronavirus outbreak On the US economy
Powell’s announcement this week is the first time he will make a statement to a new Congress, where Democrats have a majority in both the Senate and House of Representatives. The government of President Joe Biden is also a Democrat.
In addition, Powell’s statement is important. Because investors are worried that A rebound in US government bond yields And the number of inflation signals a sharp rise. May push the Fed to end the monetary easing policy. After earlier estimates that the Fed will keep interest rates close to 0% for about two years.
The Fed previously signaled a slowdown in economic stimulus by lowering its bond purchase limit following a quantitative easing (QE) in 2013, which prompted the Fed to reduce injecting money into the economy. This caused a sharp collapse in Wall Street and global stock markets in the year.
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