Stocks Pull Back As Treasury Yields Rise

Stocks Set To Open Lower

S&P 500 futures are losing ground in premarket trading as the market faces resistance near record highs.

Yesterday, stocks moved closer to record levels as traders continued to buy into the strong rally. Meanwhile, Treasury yields have moved to multi-week highs as bond traders remained worried about inflation.

Currently, the yield of 10-year Treasuries is trying to settle above 1.67%. So far, the rise in yields did not put any pressure on stocks, but the situation may change in case the yield of 10-year Treasuries gets above the 1.70% level and begins to move towards yearly highs near 1.77%.

Initial Jobless Claims Decline To 290,000

The U.S. has just released Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims Report indicated that 290,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 300,000. Continuing Jobless Claims decreased from 2.6 million (revised from 2.59 million) to 2.48 million compared to analyst consensus of 2.55 million.

Today, traders will also have a chance to take a look at Existing Home Sales report for September. Analysts expect that Existing Home Sales increased by 1.2% month-over-month after declining by 2% in August.

WTI Oil Declines Despite Falling Inventories

Yesterday, EIA Weekly Petroleum Status Report indicated that crude inventories declined by 0.4 million barrels compared to analyst consensus which called for an increase of 1.9 million. Meanwhile, domestic crude oil production declined from 11.4 million barrels per day (bpd) to 11.3 million bpd, which was also bullish for oil.

However, WTI oil failed to gain additional upside momentum and moved back to the $83 level after an unsuccessful attempt to settle above $84. WTI oil faced significant resistance in the $83 – $84 area in recent trading sessions, and it looks that traders continued to take profits after the major rally. It should be noted that the bullish trend remains strong, and WTI oil has a good chance to continue its upside move in the upcoming trading sessions.

For a look at all of today’s economic events, check out our economic calendar.