Stock futures fall as 30-year Treasury yield hits 2004 high

Stock futures were under pressure Thursday as Treasury yields pushed higher, with traders increasingly betting that the Federal Reserve will lift rates again.

Nasdaq-100 futures fell about 1%. S&P 500 futures were down 0.6%, and Dow Jones Industrial Average futures declined around 215 points, or 0.4%.

The 30-year Treasury bond yield climbed to 5.44%, its highest mark in more than two decades. The 10-year Treasury note yield advanced to 5.15%, a level last approached in July 2007. The 2-year note yield showed little movement by comparison.

CME FedWatch tool data derived from fed funds futures showed the odds of the Federal Open Market Committee approving another rate increase at its October meeting surpassing 75%. As recently as a week ago, those same odds sat near 49%.

Rising oil prices added to the pressure. WTI crude advanced 1.5% to settle at $93.57 a barrel, while Brent, the international benchmark, jumped 2.1% to $105.21.

U.S. rates strategist Vail Hartman at BMO Capital Markets said in a Wednesday note that recent purchasing managers’ index data from S&P Global indicated strong U.S. business activity, giving policymakers room to push both rates and yields higher. “If anything, the data reinforces the risk of a renewed acceleration in demand-driven inflation even if supply-side inflation subsides,” Hartman said, according to CNBC.

Strategists at UBS Global Wealth Management said in a Thursday note that their base case was for energy disruption to remain limited and for any inflation shock to fall short of derailing economic growth. “We continue to recommend positioning for further equity upside,” they said, according to CNBC. “But the latest market movements showed that volatility is likely to continue, as investors remain concerned over a range of risks, including geopolitical developments, inflation, government debt, and the sustainability of AI capex.”

Across Asia, Tokyo’s Nikkei 225 ended the session up 0.76%, Australia’s S&P/ASX 200 slipped 0.72%, and mainland China’s CSI 300 dropped 1.73%. In Europe, the broad Stoxx 600 index lost 0.4%, although energy sector stocks were an exception, rising in step with climbing crude prices.

A separate focus for markets Thursday was a planned summit between President Donald Trump and Chinese leader Xi Jinping. Treasury Secretary Scott Bessent said the U.S. and China will extend their bilateral trade truce until mid-January, according to The Wall Street Journal.