- Wall Street futures showed mixed moves with Dow futures down over 200 points on Treasury yield rise
- 10-year US Treasury yield reached 5.25%-5.29%, highest since 2002, pressuring equities
- WTI crude near $90 and Brent below $96 amid US-Iran tensions, adding inflation concerns
Wall Street futures turned choppy on Thursday, with Dow Jones futures falling more than 200 points, as a sharp rise in US Treasaury yields added pressure on equities. The pullback came despite early strength in technology-linked futures, with investors also keeping an eye on crude oil prices and key US economic data due later in the session.
Dow Jones futures were down 125 points, or 0.24%, at 51,153, while S&P 500 futures gained 17.75 points, or 0.23%, to 7,733.25. Nasdaq 100 futures rose 195.75 points, or 0.64%, to 30,894.50, showing relative strength in technology stocks.
The moves remain fluid, with real-time futures trading pointing to heightened volatility as investors assess the interest-rate outlook.
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Three Factors Weighing On Wall Street
1. Treasury yields at multi-year highs
The biggest pressure point for equities is the bond market. The 10-year US Treasury yield climbed to around 5.25%-5.29%, while the 30-year yield moved as high as 5.67%, according to the supplied market data. Both yields are at levels last seen around 2002.
Higher yields can make equities relatively less attractive while also raising borrowing costs for companies and consumers.
2. Oil prices remain elevated
Crude prices are another source of concern. WTI crude was around the $90-a-barrel mark, while Brent traded below $96, although prices remained sensitive to developments surrounding US-Iran tensions and global supply routes.
Elevated energy prices could add to inflationary pressures and complicate the Federal Reserve's policy outlook.
3. Investors await jobs data
Markets are also bracing for a fresh batch of economic indicators, including weekly initial jobless claims and the ISM manufacturing PMI on Thursday, ahead of the closely watched US nonfarm payrolls report on Friday.
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A stronger-than-expected labour market could reinforce expectations that the Federal Reserve may keep interest rates higher for longer. Citi Research has highlighted the importance of incoming economic data in assessing the path for US rates.
The latest futures moves follow a mixed session on Wednesday. The Dow Jones Industrial Average fell 443.87 points, or 0.87%, to 50,906.05, while the S&P 500 declined 19.30 points, or 0.25%, to 7,651.54. The Nasdaq Composite, however, gained 63.52 points, or 0.24%, to 26,861.06.
Meanwhile, recent PCE inflation data offered some relief. Headline PCE rose 0.3% in August, below the 0.4% estimate, while core PCE increased 0.2%, against expectations of 0.3%.
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