By Avinash P and Purvi Agarwal
Aug 20 (Reuters) – The main U.S. indexes were on track to open lower on Thursday as a rebound in government bond yields hurt sentiment, while retail bellwether Walmart’s rare sales miss disappointed investors.
Walmart lost 7.3% in premarket trading after missing Wall Street expectations for quarterly comparable sales as shoppers pulled back on spending in the face of rising gas prices.
Concerns over elevated oil prices stemming from the Iran conflict and increasing government debt battered bond and stock markets this week. The U.S. 30-year Treasury yield rose to a near-two-decade high before pulling back sharply on Wednesday after the U.S. Treasury announced support measures for long-duration bonds.
However, the relief from the Treasury intervention appeared short-lived, with the 30-year yield adding 5 basis points to 5.244%. On the benchmark 10-year bond, it inched up as well and was last at 4.69%.
The Treasury Department said on Wednesday total U.S. debt has topped $40 trillion for the first time.
“There really wasn’t that big of a deal what he (Bessent) said, although the market treated it that way, and they’re probably looking at it now going like that’s not really going to change or move the needle much,” said Joe Saluzzi, co-manager of trading at Themis Trading.
“As the yields start to continue to move up, equity investors will continue to have a problem with it.”
At 08:51 a.m. ET, Dow E-minis fell 407 points, or 0.76%, S&P 500 E-minis were down 35.75 points, or 0.46%, and Nasdaq 100 E-minis lost 192.5 points, or 0.65%.
Megacap and growth stocks were mostly lower on Thursday, while Nvidia inched up marginally.
Oil prices rose 3%, extending gains for the fifth consecutive session on stalled U.S.-Iran peace talks and Middle East supply disruptions.
Recent macro developments have knocked the S&P 500 and the Dow off record highs clocked earlier this month on the back of a strong earnings season, as results from companies in several sectors including some AI hyperscalers paint a strong picture of corporate America.
The number of Americans filing claims for unemployment benefits slipped last week, suggesting the labor market remains stable despite a surprise drop in employment in July.
Investors will watch for remarks from St. Louis Fed President Alberto Musalem later in the day.
Minutes from the U.S. Federal Reserve’s July meeting, released on Wednesday, showed inflation concerns deepening at the central bank, with “several” policymakers ready to raise interest rates and “many” saying a hike in borrowing costs will be needed if inflation does not fall to the central bank’s 2% target.
In early movers, Coty slumped 17.5% after the CoverGirl owner forecast current-quarter earnings below expectations and withheld its annual outlook.
Shares of cryptocurrency-related companies rallied a day after U.S. President Donald Trump called on Congress to pass a crypto bill. Bitcoin hoarder Strategy added 8.4% and exchange operator Coinbase Global rose 5.1%.
Biotech company Moderna dropped more than 5% a day after surging nearly 177%.
Deere gained 2.2% after the world’s largest farm-equipment manufacturer raised its full-year net income forecast.
(Reporting by Avinash P and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)
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