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S&P 500 futures go positive as rates dive on weak inflation data

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Тhursday's moves come a day after the Dow sank more than 800 points and the S&P 500 dropped more than 3 percent. It was also the 28th time since 2011 the S&P 500 posted a more than 2 percent decline, according to data from Birinyi Associates. The data also shows the broad index has traded higher 59 percent of the time in the following day, averaging a gain of 1 percent. The index also falls 41 percent of the time after such a drop, and averages a decline of nearly 2 percent on those days.

Rising U.S. Treasury yields have been keeping investors on their toesin previous sessions. The benchmark 10-year note yield recently hit its highest level in seven years while the two-year yield reached its highest mark since 2008 on Wednesday.

The rise in yields has stoked fears that rising borrowing costs could slow down the economy. It also adds concerns over what the future of U.S. monetary policy. The Federal Reserve has hiked rates three times this year and is largely expected to raise rates once more before year-end.

resident Donald Trump criticized the Fed's strategy on more than one occasion on Wednesday, saying that the central bank was "making a mistake" by raising rates also he said he wasn't happy with the Fed, and that it was "going loco" and there was no reason for them to continue to raise rates at the pace they were doing.International Monetary Fund managing director Christine Lagarde refuted Trump's claims, saying that she "would not associate" Fed Chair Jerome Powell "with craziness."

The rise in yields and the steep drop in equities comes as Wall Street braces for the latest round of corporate earnings. J.P. Morgan Chase and Citigroup are among the companies set to kick off the season. Wall Street has high hopes for corporate earnings, with analysts polled by FactSet expecting a 19 percent gain on a year-over-year basis.


 Trader Velizar Mitov

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