Major US equity indices opened slightly lower on Wednesday, weighed down by a continuous climb in the US Treasury bond yields.
The yields on the 10-year Treasury note held steady near a 7-year high, above 3%, a psychologically significant level, which makes an investment in equities less attractive. Also collaborating to the early fall was weakness concentrated in the technology sector, led by disappointing quarterly results reported by Cisco Systems.
Adding to this, looming US-China trade talks, set to begin on Thursday, and renewed geopolitical tensions, after Pyongyang signaled that Kim Jong Un might pull out of next month’s summit with the US President Donald Trump, added to the jitters and hold investors back from placing bullish bets.
On the economic data front, the Philly Fed Manufacturing Index surpassed even the most optimistic estimates and jumped to 34.4 in May from 23.3 in April, while initial weekly jobless claims increased more than expected to a one-month high of 222K.
During the opening hour of trade, the Dow Jones Industrial Average was down over 70-points to 24,700 and the broader S&P 500 Index slipped around 4-points to 2,720. Meanwhile, tech-heavy Nasdaq Composite Index nearly 15-points to 7,384.