US stock market LIVE updates: The US stock futures were trading deep in the red in Thursday’s session, indicating another weak start to Wall Street, as investors remained concerned about rising bond yields and sharp swings in crude oil prices.
The tech-heavy Nasdaq futures were down 1%, while those tied to the S&P 500 and Dow Jones Industrial Average were also lower by 0.4% and 0.6%, respectively. The losses followed a sharp rise in US Treasury yields in the previous session, with the benchmark 10-year yield jumping around 15 basis points to 5.11% — its highest level in nearly 19 years, since 2007.
The 2-year Treasury note yield, which is more sensitive to expected changes in Federal Reserve policy, jumped more than 11 basis points to 4.889%, hitting its highest level since May 2024. Meanwhile, the longer-dated 30-year Treasury yield climbed 9 basis points to its highest level since 2007.
Fed rate hike bets rise as strong data fuels policy tightening fears
Bond market sentiment was hit after stronger-than-expected S&P Global manufacturing and services PMI data pointed to robust economic activity, increasing market expectations for another Federal Reserve rate hike as early as October.
In addition, weak demand at a five-year Treasury note auction added to the pressure, while comments from Fed Governor Michael Barr pushed yields even higher. Barr said in a speech this week that further rate hikes “are likely to be needed” to bring inflation back to the Fed’s 2% target.
Williams said the Fed is done with explicit forward guidance, adding that policymakers will instead assess incoming economic data before deciding on future policy moves.
US inflation has remained stubbornly high, prompting the Federal Reserve to raise its short-term interest rate last week for the first time in three years.
Following the Fed rate hike, the odds of another quarter-point rate increase in October rose on Wednesday to 66.4% from 55% a day earlier, according to the CME Group’s FedWatch tool. Those odds stood at less than 10% a month ago.