US stock index futures were sharply lower on Wednesday morning, when bond yields fell again and triggered concerns about the economic outlook. Increasing trade tensions in China-US. trade also weighted on markets.
If at 6:46 am, Dow futures indicated a negative open of more than 122 points. Futures on S & P and Nasdaq were also both lower points.
Dow was set to add 4.7% decline so far in May, with risk aversion rising in recent days as bond yields dropped. The 10-year government bond yield, which affected a 19-month low on Tuesday, returned in early trading Wednesday to 2.24%. Part of the so-called yield curve, which was reversed as 3-month government bonds, last gave 2.3456%, well above the 1
It comes at a time when the world's two largest economies are locked in a long-standing trade dispute.
Washington and Beijing have spent thousands of dollars worth of each other's goods since the beginning of 2018, beating financial markets and sourcing business and consumer sentiment.
Lately, China moved a bleak threat this week through state media on rare earth minerals, a market that is crucial to the US technology and defense industry that China dominates.
Chipmakers, who have been beaten this month for fear of disturbed supply chains and lost customers because of the trade war, fell back in premarket trading on Wednesday. Micron and Nvidia were lower.
Trade bellwethers Boeing and Caterpillar were also lower in premarket trading.
Italy's dispute with the European Commission over its budget, wins for European parties in EU elections and political unrest in Austria and Greece have all added to gloomy market views.
At the data front, the Richmond Fed production survey for May is expected to be around 10:00 ET, with the Dallas Fed data supplied a little later in the session.