(Reuters) – U.S. stock index futures fell on Tuesday as higher Treasury yields weighed on growth stocks, while a slow pace of expansion in services activity in China stoked worries over demand in the world’s second largest economy.
Yield on the 10-year Treasury notes climbed to 4.21% ahead of more economic data and the Federal Reserve’s policy meeting later this month.
Shares of Apple, Nvidia, Tesla and Netflix lost between 0.6% and 1% before the bell.
Adding to the downbeat mood, a private survey showed China’s services activity expanded at the slowest pace in eight months in August, as weak demand persisted and stimulus efforts failed to meaningfully revive consumption.
The news sent U.S.-listed shares of Chinese companies including PDD Holdings, JD.com, Baidu and Alibaba down between 0.9% and 1.7%.
The S&P 500 ended higher on Friday after a jump in unemployment cemented expectations of a pause in the Fed’s interest rate hikes this month.
Traders’ bets that the Fed will leave rates unchanged in the next policy meeting stood at 93%, while pricing in a 62% chance of a pause in November, up from 52% a week ago, according to the CME FedWatch tool.
Meanwhile, Goldman Sachs lowered the chances of a U.S recession in the next 12 months to 15% from 20% amid continued easing inflation and labor market data.
Investors now await factory orders data due at 10:00 a.m. ET.
At 5:19 a.m. ET, Dow e-minis were down 24 points, or 0.07%, S&P 500 e-minis were down 9.25 points, or 0.2%, and Nasdaq 100 e-minis were down 58.5 points, or 0.38%.
Among other stocks, shares of Airbnb and Blackstone added 5.2% and 4.3% , respectively, in premarket trading as the companies were set to join the S&P 500 index.
Oracle gained 1.6% after Barclays upgraded the software firm to “overweight” from “equal weight.”
Next week, focus will be on the consumer price index data, which could offer clues on inflationary pressures in August. The Fed’s next policy meeting is on Sept. 20.
(Reporting by Shristi Achar A in Bengaluru; Editing by Arun Koyyur)
