S&P 500 Futures retreat from record top as US 2-year Treasury yields jump to 19-month high

• S&P 500 Futures struggle to extend nine-day uptrend around all-time high.
• US Treasury yields track inflation expectations to the north ahead of the key data.
• Wall Street cheers US stimulus hopes, upbeat earnings season.

S&P 500 Futures fail to ignore reflation fears, stepping back from the all-time high to 4,565 during early Wednesday. In addition to the Fed tapering tantrums, cautious sentiment ahead of the key advance estimation of the US Q3 GDP.

US inflation expectations jump to the highest levels last seen during May 2006, marking acute pressure on the Fed policymakers to consolidate the easy money streams. The same propels the US 2-year Treasury yields to the highest since May 2020, around 0.49% by the press time.

It’s worth noting that the 10-year Treasury yields also snap a three-day downtrend and challenge the stock future, up by one basis point around 1.62% at the latest.

Not only in the US but the jump price pressure in Australia and rallying inflation expectations in the Eurozone also challenge the equity bulls even if the earnings season has been good so far. That being said, the tech giant Google beat Q3 estimates during the previous day’s release.

Talking about data, US CB Consumer Confidence unexpectedly recovered in October while figures concerning New Home Sales for September and Richmond Fed Manufacturing Index for the last month also flashed better-than-forecast numbers.

Moving on, the US Durable Goods Orders for September, expected -1.1% versus +1.8% prior, can offer intermediate moves to the market players ahead of tomorrow’s key US GDP data. Also important will be the chatters surrounding the US stimulus package and central bank moves.