Challenging Start for S&P 500 Futures in Q2 2024

S&P 500 futures declined on Wednesday, continuing Wall Street's challenging start to the second quarter of 2024. The release of ADP data in the morning, indicating that private payrolls in March exceeded expectations, highlighted the economy's strength. This development led to an increase in bond yields as investors' concerns about the Federal Reserve's rate cut trajectory intensified.

Atlanta Fed President Raphael Bostic, predicting only one rate cut this year in the fourth quarter, joined several Federal Reserve officials, including Chair Jerome Powell, in speaking at various events across the country on Wednesday. Their remarks add context to Tuesday’s market downturn, fueled by persistent inflation and solid manufacturing data, which suggested the Federal Reserve might delay reducing borrowing costs. Following this, the yield on the US Treasury 10-year note reached its highest point since November on Tuesday, and oil prices hit their peak since October.

Meanwhile, the Nasdaq is showing early signs of price accumulation and divergence, hinting at potential resilience or a future correction should the macroeconomic outlook shift significantly.