Dow Futures Drop, Bond Yields Skid Lower

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Stock futures point to the Dow shedding over 450 points Thursday while Treasury yields sank for a fourth day as investors unwound bets on a spell of high growth and inflation.

Futures on the S&P 500 dropped 1.3%, suggesting the broad stock-market gauge will pull back at the opening bell a day after it closed at an all-time high. Contracts for the technology-heavy Nasdaq-100 retreated roughly 1.4%.

Stocks have powered to a series of record highs this year, but some investors have grown concerned about the outlook for the economy on signs that labor shortages and supply-chain bottlenecks may crimp the pace of recovery. The spread of the highly contagious delta variant of coronavirus globally is adding to worries. Investors also are gearing up for a spell of potentially volatile summer trading, when trading desks tend to be lightly staffed.

“There is a bit of a recognition that things aren’t looking as economically positive as they were in mid-June when everything seemed to be hitting that Goldilocks middle ground,” said Edward Park, chief investment officer at Brooks Macdonald. “Delta, or the next delta, will be a recurring risk in markets,” Mr. Park said, adding that surveys of U.S. activity had fallen short of expectations in recent days.

On the economic front, the number of people filing for unemployment insurance rose unexpectedly to 373,000 last week, slightly higher than the 371,000 who filed claims the week before. The recent level of new claims is significantly down from last spring’s peak of 6.1 million, and roughly in line with historical averages.

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