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U.S. stock futures slip as investors brace for big earnings

written by Bella Palmer
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The Dow industrials fell 0.3% to 34,451.23, the S&P 500 lost 1.2% to 4,392.59 and the Nasdaq Composite tumbled 2.1% to 13,351.08

U.S. stock futures slipped early Monday, with bond yields on the rise as investors braced for a big week of earnings.

On Thursday, which marked the end of a week shortened by the Good Friday holiday, the Dow industrials fell 113.36 points, or 0.3%, to 34,451.23, the S&P 500 lost 1.2% to 4,392.59 and the Nasdaq Composite tumbled 2.1% to 13,351.08.

The S&P 500 and Nasdaq each saw the second straight weeks of losses, down 2.1% and 2.6%, respectively, while the Dow fell 0.8% in a third-straight weekly drop.

Stock futures began tilting lower on Sunday, led by Nasdaq-100 futures as bond yields continued to climb across the curve. The yield on the 10-year Treasury note rose 4 basis points to 2.864%, while that of the 2-year note rose 4 basis points to 2.488%.

Investors remain concerned about rising inflation and how that may weigh on the economy, as the Federal Reserve struggles to keep a lid on rising prices. Goldman Sachs’s chief economist Jan Hatzius and his team predicted the U.S. economy faces a 35% chance of recession in the next two years, and 15% over the next year.

The main challenge for the Fed will be to reduce the jobs-workers gap and slow wage growth to a pace consistent with its inflation goal by tightening financial conditions enough to reduce job openings without sharply raising unemployment, said Hatzius in a note dated Sunday, as he added that ‘history suggests this may be challenging.’

The National Association of Home Builder’ April index will be released at 2:00 pm GMT. Comments are expected from St. Louis Fed President James Bullard later in the day.

Earnings will be in focus for Monday as well, with Bank of America due ahead of the open on Monday, Netflix Inc. on Tuesday afternoon and Tesla Inc. on Wednesday afternoon. Eyes will also be on Twitter Inc., which on Friday adopted a ‘poison pill’ in the face of a takeover bid announced earlier in the week by Elon Musk. Those shares rose 2% in premarket trading.

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