U.S. stock futures pointed in different directions Thursday as Treasury yields climbed to levels not seen in more than two decades, opening a new trading month after a difficult September for equities.
U.S. stock futures pointed in different directions Thursday as Treasury yields climbed to levels not seen in more than two decades, opening a new trading month after a difficult September for equities.
The S&P 500 futures contract was up 0.29%, while Nasdaq $NDAQ-100 futures climbed 0.60%; Dow futures dipped 0.04%. In bond markets, the 10-year Treasury touched 5.338% during Thursday's session — a level not seen since April 2002 — before retreating, with the 30-year yield reaching 5.64%. Brent crude futures hovered around $100.47 per barrel.
Government bond yields surged overnight before easing, according to The Wall Street Journal, with concerns over growing fiscal deficits driving volatile trading. European bond markets followed suit, with French and U.K. yields on long-dated debt rising by as much as 10 basis points before the moves faded.
The mixed futures action follows an uneven September for U.S. stocks. The S&P 500 shed 0.5% in September, the Dow lost 4.3%, and the Nasdaq finished the month up 1.9%. Over the full third quarter, the S&P 500 and Nasdaq each posted gains of roughly 2%, while the Dow declined 2.7%. Through September, investors wrestled with climbing oil prices and a sharp move higher in Treasury yields, both of which fed worries that the Federal Reserve would need to raise rates further.
As October opens, investors are balancing competing signals. Yields have remained stubbornly high, and the Federal Reserve is set to deliver its next policy decision before November arrives, while moderating inflation readings have offered at least some reassurance to the market.
"While those factors remain headwinds, corporate earnings have continued to show resilience," said Tracie McMillion, Wells Fargo $WFC Investment Institute's head of global asset allocation strategy, in comments to CNBC. "The key question is whether that earnings strength can continue as borrowing costs remain elevated."
Thursday's economic calendar includes initial jobless claims at 8:30 a.m. ET, with Friday bringing the September employment report. Nike $NKE is also scheduled to post its quarterly results once markets close Thursday.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.