Dow futures increase after yields rise, easing recession concerns

U.S. stock index futures were slightly higher Thursday morning as the rapid decline in bond yields stabilized, easing concerns about a recession.

The protracted trade dispute between China and the U.S. still weighed on markets. A senior Chinese diplomat ramped up the rhetoric overnight. Also, China has halted soy purchases from the U.S., according to Bloomberg News.

At around 7:03 a.m. ET, Dow futures indicated a positive open of more than 20 points. Futures of S&P and Nasdaq were both seen slightly higher.

The 10-year yield added 3 basis points to 2.26% after hitting a 19-month low on Wednesday. Plunging yields this month, along with a yield curve inversion, has raised concerns about slowing economic growth. On Wednesday, the Dow dropped more than 200 points as bond yields declined.

Bank shares rose slightly along with yields. Bank of America and J.P. Morgan Chase traded 0.3% higher in the premarket. Citigroup also rose 1.2% after an analyst at Goldman Sachs upgraded the bank to buy  from neutral. The analyst cited the potential for strong returns moving forward.

Chinese Vice Foreign Minister Zhang Hanhui said Thursday that provoking trade disputes amounted to “naked economic terrorism. ”

Washington and Beijing have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

Investors are likely to closely monitor a flurry of economic data on Thursday. The latest weekly jobless claims and a second reading of gross domestic product data are both due at around 8:30 a.m. ET. Advance economic indicators and pending home sales for April are set for release slightly later in the session.

source: CNBC