US Stock Futures Drop Over 1% Amid Rising Treasury Yields and Inflation Concerns
US stocks: Nasdaq, S&P 500 futures tumble 1% as yields jump on inflation worries
The Economic Times
Image: The Economic Times
Futures for the Nasdaq and S&P 500 fell over 1% on Friday as Treasury yields surged to 4.54%, the highest since June 2025, amid inflation fears exacerbated by the ongoing conflict in the Middle East. The likelihood of a Federal Reserve interest rate hike in December has also increased significantly.
- 01The yield on 10-year Treasury notes rose to 4.54%, its highest level since early June 2025.
- 02The odds of a 25 basis point interest rate hike by the Federal Reserve in December have more than doubled to about 40%.
- 03Brent crude prices increased by nearly 3% to $109 a barrel due to the closure of the Strait of Hormuz.
- 04The Dow E-minis fell by 330 points (0.66%), while S&P 500 E-minis dropped by 80.75 points (1.07%).
- 05Airline stocks declined as oil prices surged, with Delta Air Lines, United Airlines, and Southwest Airlines falling between 1.3% and 1.5%.
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Futures for the Nasdaq and S&P 500 dropped over 1% on Friday, driven by rising Treasury yields amid inflation concerns linked to the ongoing conflict in the Middle East. The yield on 10-year Treasury notes surged to 4.54%, marking its highest level since early June 2025. This increase in yields is causing investors to anticipate faster-than-expected interest rate hikes from the U.S. Federal Reserve, with the likelihood of a 25 basis point increase in December rising to about 40%. Brent crude oil prices also climbed nearly 3% to $109 a barrel due to the closure of the Strait of Hormuz, further fueling inflation expectations. The Dow E-minis fell by 330 points (0.66%) and S&P 500 E-minis by 80.75 points (1.07%). This market pullback follows a record-setting session on Wall Street, where the S&P 500 and Nasdaq had previously closed at all-time highs. Investors are also monitoring the results of the recent U.S.-China summit, which did not yield significant breakthroughs.
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Rising Treasury yields and oil prices may lead to increased borrowing costs and higher prices for consumers, affecting everything from mortgages to everyday goods.
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