US Stock Indexes Pressured on Opening by Surging Yields; Tesla Reports After the Bell

The major U.S. stock indexes are expected to open lower based on the pre-market futures trade on Wednesday. Investors are reacting to a surge in U.S. Treasury yields to new multi-year highs amid rising interest rates. The news erased earlier gains that were fueled by streaming giant Netflix after it reversed customer losses.

At 13:00 GMT, the blue chip Dow Jones Industrial futures are trading 30444.00, down 132.00 or -0.43%. The benchmark S&P 500 Index is at 3712.50, down 20.25 or -0.54% and the tech-heavy NASDAQ Composite Index is trading 11141.00, down 57.75 or -0.52%.

Sellers Reacting to Treasury Yield Surge

The yield on the benchmark 10-year Treasury note climbed to its highest levels since late 2008 as a selloff in U.S. government bonds resumed, according to Reuters.

Treasury yields are rising across the board on Wednesday as concerns over a recession spread among investors.

The yield on the 10-year Treasury was last at 4.086%, up by nearly eight basis points after hovering just below the key 4% level for much of Tuesday.

The policy-sensitive 2-year Treasury yield rose by around 6 basis points to 4.501%.

Recession Fears Weigh

Concerns about a recession have been getting more intense among investors as Federal Reserve policymakers continue to blow the hawkish horn. The latest was Minneapolis Fed President Neel Kashkari who said on Tuesday he saw no reason not to push the central bank’s benchmark funds rate above 4.75% in order to tackle inflation. Such levels were last seen in the first half of 2006.

Jeff Bezos Warns of Recession

Ahead of the cash market opening on Wednesday, Amazon founder Jeff Bezos became the latest corporate leader to warn about the state of the economy, cautioning that rougher times are likely ahead.

In a tweet posted Tuesday evening, the former president and CEO of the online retailing giant echoed comments that Goldman Sachs Chief Executive David Solomon made to CNBC earlier in the day, CNBC reported.

“Yep, the probabilities in this economy tell you batten down the hatches,” Bezos said in a comment attached to a clip of Solomon’s “Squawk Box” interview.

JPMorgan Chase CEO Jamie Dimon has been warning of troubles ahead, saying recently that the situation is “very, very serious” and that the U.S. could slip into recession in the next six months.

Earnings Season Continues

Ahead of today’s opening third-quarter earnings reports were released by ASML, Baker Hughes, Intuitive Surgical, United Airlines, Procter & Gamble and Travelers.

ASML shares jumped more than 5%, while Baker Hughes climbed 2.2%. Intuitive Surgical reported better-than-expected third-quarter earnings and sales results, as the stock rose 9% ahead of the opening. United Airlines topped third-quarter earnings and revenue views, sending the stock about 5% higher.

Tesla will report after the market close. Its shares were slightly lower Wednesday.