Nasdaq Futures Signal Cautious Bearish Trend Ahead of Wall Street Opening
Fed Chair Kevin Warsh's speech at Jackson Hole has sent ripples through Wall Street, with Nasdaq futures predicting a cautious bearish trend on Monday. Despite the Nasdaq-100 index still being up 25.7% for the year, investors are bracing themselves for potential losses due to high valuations and interest rate hikes.
The yield on US two-year Treasuries is at 4.36%, while the 10-year Treasury yield stands at 4.73%. The higher yields could lead to selling in growth stocks, particularly technology sector companies such as Nvidia, AMD, and Marvell Technology, which fell by 4.58%, 2.3%, and 10.3% respectively on Friday.
The Fed's focus on inflation is also causing concern, with Warsh stating that 54% of the PCE basket has recorded an increase of more than 3% in prices on a yearly basis. The Nasdaq-100 index closed at 29,433.43, down 208.13 points or 0.70%, while the S&P 500 dropped 0.25% to end at 7,711.76.
The market is expected to remain volatile, with the VIX near 14.43 and oil prices around $83.40 per barrel. The September Fed rate-hike probability has jumped to 55.7%, according to the CME Group's FedWatch.