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US stocks open lower as Treasury yields surge toward 19-year highs
The 10-year Treasury yield jumped to about 5.1%, lifting rate-hike expectations for October to 66.4% and weighing on technology and energy-sensitive stocks.
US stock index futures pointed to a weaker start to Thursday’s session as investors focused on sharply higher Treasury yields and volatile crude oil prices, according to LiveMint Markets. Nasdaq futures were down 1.0%, S&P 500 futures fell 0.4%, and Dow Jones Industrial Average futures declined 0.6%.
The move followed a rise in bond yields from the prior session, with the 10-year Treasury yield climbing roughly 15 basis points to 5.11%, its highest level in nearly 19 years, since 2007. The 2-year yield rose more than 11 basis points to 4.889%, its highest level since May 2024, while the 30-year yield also increased to its highest level since 2007.
Bond market sentiment deteriorated after stronger-than-expected S&P Global manufacturing and services PMI data suggested robust economic activity, which in turn supported expectations for another Federal Reserve rate hike as early as October, LiveMint Markets said. A weaker five-year Treasury note auction and remarks from Fed Governor Michael Barr, who said further rate hikes are likely needed to return inflation to the Fed’s 2% target, also pushed yields higher.
After the Fed’s most recent short-term rate increase, the probability of another quarter-point hike in October rose to 66.4% from 55% a day earlier, according to CME Group’s FedWatch tool. Energy-sensitive airline and cruise stocks edged lower in premarket trading, while Oracle fell after a report said the company sent a force majeure notice to a New Mexico data centre.
Latest closeWTI crude $95.27 ▲3.4%|S&P 500 7,675.92 ▼0.4%|Nasdaq Comp. 26,749.30 ▼0.7%