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S&P 500 Futures, US Treasury yields portray risk-on sentiment

  • S&P 500 Futures track Wall Street’s gains, US 10-year Treasury yields wobble.
  • Vaccine optimism joins hopes of extended easy-money policies to favor bulls.
  • Covid woes, geopolitics probe optimists amid a light calendar.

Market sentiment keeps the week-start optimism during a lackluster Asian session on Tuesday. While portraying the mood, S&P 500 Futures print 0.17% intraday gains to 4,483 whereas the US 10-year Treasury yields seesaw around 1.26% by the press time.

It’s worth noting that S&P 500 refreshed record top, together with Nasdaq, during Monday’s North American trading whereas the key US Treasury yields remain mildly offered around 1.25% to end the US trading the previous day.

Read: S&P 500 darts to fresh all time highs as risk sentiment recovers

While seeking the catalysts for fresh impulse, expectations of faster jabbing and challenges to tapering talks take the front row. Not only the US Food & Drug Administration’s (FDA) approval to Moderna–BioNTech vaccine but the UK’s readiness to order 35.00 million doses of Pfizer vaccine for booster shot also portrays the vaccine optimism.

On the other hand, the preliminary readings of the US PMIs for August came in softer than expected, suggesting the need for further easy-money policies. Before that, Dallas Fed President Robert Kaplan signaled to step back on his tapering calls due to the Delta covid variant outbreak.

It should be noted, however, that the UK’s calling of the emergency videoconference of the Group of Seven (G7) leaders to discuss the Taliban-related issues, as well as the faster spreading of the virus variant, challenge the risk appetite. Additionally, China’s crackdown on technology shares and hints that the US Securities and Exchange Commission (SEC) will increase hardships for Beijing-based companies’ listing also challenge the optimists.

Looking forward, a lack of major data/events can keep market players searching for fresh clues for clear direction ahead of this week’s Jackson Hole Symposium speeches, starting from August 25. In doing so, the COVID-19, China and Afghanistan, not to forget central banks, are crucial factors to follow.