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Wall Street set for muted open as rising yields dent tech shares

  • Banks lengthen features as yields rise
  • November PMI knowledge due at 9:45 a.m. ET
  • Futures: Dow up 0.08%, S&P off 0.02%, Nasdaq slips 0.19%

Nov 23 (Reuters) – U.S. inventory indexeswere set for a sluggish begin on Tuesday as rising Treasury yields weighed on main expertise shares, whereas financial institution shares prolonged features as buyers priced in early financial coverage tightening by the Federal Reserve.

Futures monitoring the tech-heavy Nasdaq 100 index (.NDX) underperformed in buying and selling earlier than the bell as yields prolonged features after Jerome Powell’s renomination as Fed Chair raised market expectations for an rate of interest hike by as quickly as June 2022.

High-growth tech shares are delicate to rising charges as buyers low cost future earnings in opposition to returns on debt.

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Bank shares prolonged Monday’s features, withBank of America (BAC.N), J.P.Morgan (JPM.N) and Morgan Stanley (MS.N) all rising a couple of % every.

“It’s possible that interest rates will be moved higher earlier than expected,” mentioned Rick Meckler, associate at Cherry Lane Investments In New Vernon, New Jersey.

“But that result, while positive for bank stocks, is not positive for the rest of the stock market, particularly technology, which trades on very high price/earnings multiples.”

The Nasdaq (.IXIC) and the S&P 500 (.SPX) had slipped from document highs on Monday, as Powell’s nomination prompted a risky session. Concerns over rising inflation additionally remained on the forefront, with buyers fearing the potential financial influence of upper costs lasting longer than anticipated.

Focus is now on upcoming IHS enterprise exercise knowledge, due at 9:45 a.m. ET (1445 GMT).

At 8:22 a.m. ET, Dow e-minis had been up 27 factors, or 0.08%. S&P 500 e-minis had been down 1 factors, or 0.02% and Nasdaq 100 e-minis had been down 30.5 factors, or 0.19%.

Trading volumes are anticipated to be low this week forward of the Thanksgiving vacation on Thursday and a shortened session on Friday.

Among different premarket movers, Zoom Video Communications Inc (ZM.O) fell 9.5% after its third-quarter income progress fee slowed to 35% as demand for its video-conferencing instruments eased from pandemic-fueled heights final 12 months. learn extra

XPeng Inc rose 4.4% on the electrical automobile maker’s upbeat third-quarter outcomes and outlook. Most different EV makers, together with Tesla Inc (TSLA.O) and Lucid Group (LCID.O), fell.

Best Buy Co Inc (BBY.N) slid 11.7% after the electronics retailer forecast fourth-quarter comparable gross sales beneath expectations as a consequence of provide chain points. learn extra

Chipmakers Micron Technology (MU.O) and Western Digital Corp (WDC.O) rose 2.0% and 3.3%, respectively, outpacing their friends after Mizuho upgraded the shares to “buy” from “neutral”.

(This story corrects paragraph 2 to say Powell’s renomination, not reappointment)

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Reporting by Ambar Warrick and Devik Jain in Bengaluru; Editing by Maju Samuel

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