US stock futures were higher Tuesday night after the Nasdaq slumped on its worst day since March, when a surge in bond yields drove stocks down.
The Dow Jones Industrial Average futures rose 108 points. The futures on the S&P 500 and Nasdaq 100 both traded in positive territory.
Semiconductor company Micron shares fell more than 3% in expanded trading after it reported a first quarter 2022 earnings and revenue outlook that missed consensus estimates.
In regular trading, the Nasdaq Composite fell 2.83% to 14,546.68 for its worst day since March. The S&P 500 lost 2.04% and the Dow Jones Industrial Average lost 569.38 points, or 1.63%.
The Dow and S&P are down 3% for September. The Nasdaq is down more than 4.5%.
Stocks across all industries slid as the benchmark 10-year government bond yield hit 1.567% high on Tuesday. Tech stocks led the broader markets, with Facebook, Microsoft and Alphabet losing more than 3%. Amazon lost more than 2%. Rising bond yields hurt growth stocks, including technology stocks, by reducing the relative value of future earnings. The tech-heavy Nasdaq hit its tenth day off in the last 15 sessions.
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"Some may believe that sentiment has gotten too exuberant, which contestants believe is what sets the stage for the market decline we are seeing today," said Brian Price, director of investment management at Commonwealth Financial Network. "If the interest rate increases moderately from here due to falling inflation expectations, it would not surprise me that the market would resume its uptrend early in the fourth quarter."
The Washington debt ceiling debate also weighed on stocks, as did ongoing concerns over supply chain problems and rising consumer prices. Federal Reserve Chairman Jerome Powell told the Senate Banking Committee Tuesday that inflation could last longer than expected due to supply chain problems and reopening pressures.
"Today's rate-driven sell-off is a reminder of how effective the monetary stimulus has been as the Fed signals that the contingency measures will be lifted soon," said Charlie Ripley, senior investment strategist at Allianz Investment Management. "This is an uncomfortable time for market participants as Fed support will soon be lifted and stock markets will have to relearn how to stand on their own and cut bond purchases when they feel the economy is not ready."
The pending home sales data will be released on Wednesday.