US pre-open: Futures in the green following S&P 500's worst day in months

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Wall Street futures were pointing to a positive open ahead of the bell on Wednesday following the S&P 500’s worst session in four months.

As of 1230 BST, Dow Jones futures were up 0.42%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.50% and 0.61% firmer, respectively.

The Dow closed a whopping 569.38 points lower on Tuesday as the yield on the benchmark 10-year Treasury note peaked at around 1.56%.

On Wednesday, the 10-year note slipped roughly two basis to roughly 1.50, while the 30-year Treasury note fell to around 2.061%.

Tech stocks, which took a beating amid the rising yields, were higher in pre-market trading, with Facebook, Amazon, Apple and Alphabet all trading about 1% higher in pre-market.

The US debt ceiling debate in the capital also weighed on stocks, with Treasury Secretary Janet Yellen telling House Speaker Nancy Pelosi that Congress had until 18 October to hike or suspend the debt ceiling, warnings that failure to do so would have dire consequences for the US economy.

AvaTrade‘s Naeem Aslam said: “Republicans have stalled the Biden administration’s attempt to lift the country’s debt ceiling in front of the Senate, despite the fact that the US Treasury has less than three weeks before it runs out of funds to cover its short-term obligations. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell have both warned of the potentially dire ramifications of the government failing to lift the debt ceiling.

“Investors should incorporate a potential government shut down in their risk assessment frameworks over the next few weeks.”

On the macro front, mortgage application volume fell 1.1% in the week ended 24 September following a rebound in the previous week, according to the Mortgage Bankers Association. The principal reason for the decline was the purchase index, which dipped 1.2% week-on-week, while refinancing activity decreased 0.9% from the prior week.

Still to come, August’s pending home sales report will be published at 1500 BST.

Federal Reserve heads will speak throughout the course of the day, with Philadelphia Fed president Patrick Harker delivering a speech at 1400 BST and Fed chairman Jerome Powell will appear at an ECB forum on central banking at 1545 BST.

No major corporate earnings were slated for release on Wednesday.