US stock futures remained in red before the opening bell on Thursday, August 20 following a winning session on Wall Street as US Treasury's buyback pushed bond yields lower.
Nasdaq 100 and S&P 500 futures traded 0.05% lower at $29,496 and $7,724.5 respectively, while Dow Jones Industrial Average dipped 0.22% to $53,413 by 7:20 am ET or 4:50 pm IST.
Stock futures were under pressure against the backdrop of several global cues, including negative sentiment over US Treasury buyback plan and rally in oil prices as US-Iran tensions continue
Here are three reasons why US stock futures are slipping today:
Elevated Borrowing Rates Expected
US Treasury said it's increasing buybacks of long-dated government debt, indicating that the US wants to lower borrowing costs after yields hit multi-decade highs. Despite this, long-term rates are likely to remain elevated, driven by large fiscal deficit and rising defence spending, by the US with the Iran conflict adding to these pressures, Michael Schumacher, former head of macro at Wells Fargo told CNBC.
Oil Prices Rise
The fall in stock futures comes as oil prices advanced, with brent crude trading above $94 a barrel, while West Texas Intermediate for October delivery was around $87 after US President Donald Trump said the U.S. would begin “most crushing economic operation ever taken against any country” against Iran. “This will be Economic Warfare and Isolation on an unprecedented scale,” he wrote on Truth Social.
Walmart Shares Slip
Walmart shares are also impacting US equities as the retail giant slipped despite reporting better-than-expected quarterly results and hiked its full fiscal-year outlook. A drop in drug prices weighed on US sales and pushed Walmart shares down about 6% in pre-market trading.
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