Investing.com -- U.S. stock futures weakened Monday, weighed by soaring bond yields and as investors warily awaited the release of quarterly earnings from a number of the major tech giants.
By 06:45 ET (10:45 GMT), the Dow Futures contract was down 180 points, or 0.5%, S&P 500 Futures traded 23 points, or 0.6%, lower and Nasdaq 100 Futures dropped 90 points, or 0.6%.
10-year U.S. Treasury yields climbs past 5%
The main indices on Wall Street suffered last week, with rising U.S. Treasury yields weighing heavily. The broad-based S&P 500 dropped 2.4%, its first losing week in three, while the tech-heavy Nasdaq Composite fell 3.2% and the blue chip Dow Jones Industrial Average fell 1.6%.
The benchmark 10-year Treasury yield climbed to 5% on Friday, its highest level since the financial crisis in 2007, before slipping slightly.
However, yields have shot up once more Monday, with the 10-yield reaching 5.025%, as investors have become very wary about the potential for rates staying high for longer, particularly after Fed Chair Jerome Powell mentioned the possibility of more monetary tightening in a speech last week.
Earnings from tech giants due
Investors are also on edge ahead of this week’s corporate results, with earnings due from a group of tech stocks whose gains have propelled the S&P 500 higher this year.
Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are due to report on Tuesday, Meta (NASDAQ:META) is to report on Wednesday and Amazon (NASDAQ:AMZN) reports on Thursday.
Those stocks, together with Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA) have accounted for the bulk of the S&P 500's 10% year-to-date gain, so any disappointing results could result in widespread fallout.
Chevron set to buy Hess for $53 billion
Elsewhere, the oil market is once more the center of major M&A, as Chevron (NYSE:CVX) announced plans to buy smaller rival Hess (NYSE:HES) in a $53-billion all-stock deal, implying a premium of about 4.9% to the share's last close.
The deal comes weeks after rival Exxon (NYSE:XOM) made a $60 billion offer for Pioneer Natural Resources (NYSE:PXD) that would make it the biggest producer in the largest U.S. oilfield.
Apple traded lower premarket after Foxconn (TW:2354), a major supplier of Apple's iPhones, faces a tax probe in China, according to a report in Sunday’s state-backed Global Times newspaper.
Oil falls on escalated Gaza diplomacy
Crude prices fell Monday as diplomatic efforts to contain the situation in Gaza escalated, but geopolitical tensions remained high as Israel continued to bombard the enclave.
By 05:45 ET, the U.S. crude futures traded 0.6% lower at $87.55 a barrel, while the Brent contract dropped 0.5% to $91.73 a barrel.
Israel has so far held off launching a ground assault on the region, likely providing time to negotiate a release of more hostages as well as providing a window for diplomacy.
Hamas released two U.S. hostages from Gaza late last week.
U.S. President Joe Biden visited Israel last week, and the leaders of France and the Netherlands will visit this week in search of a solution for the conflict.
That said, Israel has amassed forces around Gaza for a planned ground invasion to eliminate the Islamist group, and it’s this ground attack which is widely seen as a potential trigger for widening the Israel-Hamas conflict, potentially causing disruption to the world's biggest oil-supplying region.
(Oliver Gray contributed to this item.)