US futures fall with inflation, corporate tax plan in view

Bloomberg

The US equity-index futures dropped with Treasuries as investors weighed inflation risks and the impact of a minimum corporate tax on technology firms. The dollar ticked up.
Futures on the Nasdaq 100 and S&P 500 declined, while European stocks fluctuated between gains and losses. The 10-year rate added two basis points after Treasury Secretary Janet Yellen said a slightly higher interest-rate environment would be a plus. Oil in New York slipped after rising to $70 per barrel as short-term demand worries continued. Tesla Inc dropped in premarket trading after cancelling plans for a longer-range sedan.
While resurgent inflation has sparked a debate about when the Federal Reserve will start tapering monetary accommodation, recent data including the May nonfarm payrolls report seemed to vindicate the central bank’s dovish stance. Investors are trying to strike a balance between preparing for higher rates and riding a risk-on rally supported by Fed stimulus and a $4 trillion spending plan by President Joe Biden. Traders await the US consumer-price index report on Thursday for more clues.
“The slightly softer-than-expected rise in US payroll employment in May probably won’t change the Fed’s thinking, but another pickup in CPI inflation likely to be reported on Thursday will further spur the taper talk,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, wrote in a note.
Yellen said Biden should push forward with his spending plans even if they spark inflation that persists into next year. Meanwhile, the Group of Seven rich nations secured a landmark deal that could help countries collect more taxes from big firms and enable governments to impose levies on US giants such as Amazon.com Inc and Facebook Inc.
June contracts on the tech-heavy Nasdaq index fall 0.3% highlighting investor concern that a pure growth narrative may no longer be enough to support stocks. Technology shares underperformed in Europe as well, with the benchmark gauge for the sector falling from the highest level since April.
Apple Inc, Twitter Inc., and Microsoft Corp. declined at least 0.5% each in premarket New York trading. Tesla fell 1.5% after Chief Executive Officer Elon Musk tweeted on Sunday the Model S Plaid+ will be cancelled.
Bitcoin was steady around $36,000 after a roller-coaster ride over the weekend amid a cryptocurrency crackdown in China.
The Stoxx Europe 600 was little changed as of 9:43 am London time and futures on the S&P 500 fall 0.2%.
While futures on the Nasdaq 100 drop 0.3%, futures on the Dow Jones Industrial Average were little changed and the MSCI Asia Pacific Index was little changed. The MSCI Emerging Markets Index was also little changed.
The Bloomberg Dollar Spot Index rises 0% and the euro was little changed at $1.2159.
While the Japanese yen was little changed at 109.44 per dollar, the offshore yuan was also little changed at 6.3927 per dollar and the British pound falls 0.2% to $1.4126.
The yield on 10-year Treasuries advanced two basis points to 1.58% and Germany’s 10-year yield advanced one basis point to -0.20%. Britain’s 10-year yield advanced one basis point to 0.80%
Brent crude fall 0.7% to $71 a barrel and spot gold also drops 0.4% to $1,884 an ounce.