Futures fall as rising yield, China service data weigh

Higher Treasury yields knocked on growth stocks in the United States on Tuesday, as a slowing pace of rise in China’s services activity fueled concerns about demand in the world’s second-largest economy.

The 10-year Treasury note yield has risen to 4.21% ahead of additional economic data and the Federal Reserve’s policy meeting later this month.

Apple, Nvidia, Tesla, and Netflix all lost 0.6% to 1% of their value before the bell.

To add to the gloom, a private survey revealed that China’s services activity expanded at the weakest rate in eight months in August, as sluggish demand remained and stimulus attempts failed to significantly boost consumption.

The revelation pushed shares of Chinese businesses listed in the United States, including PDD Holdings, JD, Baidu, and Alibaba, down between 0.9% and 1.7%.

The S&P 500 finished higher on Friday as an increase in unemployment confirmed predictions of a pause in the Fed’s interest rate hikes this month.

According to the CME FedWatch tool, traders’ bets on the Fed leaving rates steady at the next policy meeting stood at 93%, with a 62% chance of a pause in November, up from 52% a week ago.

Meanwhile, Goldman Sachs reduced the likelihood of a US recession in the next 12 months from 20% to 15%, citing continuous weakening in inflation and labour market statistics.

Investors are now waiting for factory orders data, which is due at 10:00 a.m. ET.