- US stock futures fell amid rising Treasury yields and geopolitical tensions
- Dow futures dropped 0.13%, Nasdaq futures declined 0.25%, S&P 500 futures fell 0.17%
- US Treasury yields hit highest levels in 20 years, reducing stock market appeal
US stock futures traded lower on Monday, following higher US Treasury yields, the impending Federal Reserve minutes as well as geopolitical uncertainties such as the closure of the Strait of Hormuz.
The Dow Jones Industrial Average futures were down 0.13% to $51,407, while the Nasdaq Composite Index futures declined 0.25% to $30,985.25 while S&P 500 futures reduced 0.17% to $7,764.25.
ALSO READ: US Jobs Report: September Payrolls Rise Just 29,000, Unemployment Rate Hits 4.2%
The first major reason for the decline was US Treasury Yields surging to their highest amounts in the past two decades, likely reducing positive investor sentiment on the stock market as a viable avenue, as the Yields seemed to provide a more stable and profitable alternative.
The second factor affecting the futures is the impending release of the minutes of the Federal Reserve meeting that was held in September on Wednesday, Oct. 7. Softer US Jobs data seemed to allay worries regarding the Fed increasing the interest rate this month. US job growth slowed sharply in September, with nonfarm payrolls rising by just 29,000, well below economists' expectations, while the unemployment rate edged higher to 4.2%.
Reuters citing data released by the US Labor Department reported that payrolls increased by 29,000 last month, compared with a downwardly revised gain of 133,000 in August. Economists polled by Reuters had expected the US economy to add 90,000 jobs in September. The August payroll increase was earlier reported at 162,000.
The September reading marked a significant slowdown in hiring, although economists cautioned against interpreting the data as evidence of a broad deterioration in the labour market. Reuters reported that calendar-related distortions and seasonal adjustment factors may have contributed to the unusually weak figures.
The third main element to examine is the geopolitical uncertainty stemming from the closure of the Strait of Hormuz which has been creating global supply chain constraints as well as energy price volatility.
ALSO READ: Iran Warns Strait of Hormuz Will Stay Shut Until US Meets Islamabad Pact Demands
Iranian Parliament Speaker, Mohammad Bagher Qalibaf, stated on Sunday, that the Strait of Hormuz will not be reopened until the United States fulfils all seven conditions linked to the June interim agreement between Tehran and Washington.
Qalibaf said that Iran's position was "completely clear and firm" and that the strait would remain closed until the seven conditions based on the Islamabad Memorandum of Understanding are met.
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