Stock futures declined on Monday as Treasury yields increased

Stock futures declined on Monday as Treasury yields increased, causing concerns about rising borrowing costs and their potential impact on economic growth.

The 10-year U.S. benchmark rates breached the 5% level for the first time in 16 years, which may lead investors to reduce their holdings of riskier assets, such as equities. Sentiment was also affected by ongoing geopolitical tensions in the Middle East.
This week, traders will focus on the US tech sector, with companies like Microsoft, Alphabet, Meta, and Amazon reporting their third-quarter earnings.

Earnings estimates remain positive overall and stronger-than-expected figures could help alleviate the current concerns and revert the downside potential.

Apple’s stock price could continue to experience a decline after successive trading sessions in the red since last week. While the overall cautious sentiment could affect the stock’s performance, other factors contribute to this decline including global iPhone demand concerns as well as its lag in adopting AI technologies.

The company is heavily reliant on the Chinese market, which constitutes around 20% of its total sales, and the lower sales of the iPhone 15 compared to its predecessor fueled some concerns. The lower sales were partly due to expanded restrictions on iPhone use by Chinese state employees. A Chinese probe into Foxconn, one of Apple’s major suppliers, could also affect the stock’s performance.

Investors will look forward to Apple’s earnings release at the beginning of November. The publication of the company’s results could create significant volatility in particular as it would come right after the Federal Reserve’s interest rates decision. The stock’s price could see some uncertainty during the next few days in the run-up to both events.