Dow futures dropped to a more than three-month low on Thursday as Treasury yields surged to multi-decade highs, driven by concerns over inflation and rising government debt. Blowout results from Micron Technology lifted chip stocks even as broader equities retreated.
Dow futures slipped to a more than three-month low on Thursday as Treasury yields surged to multi-decade highs. Concerns over inflation and rising government debt were behind the surge, while blowout results from Micron Technology lifted chip stocks even as broader equities retreated.
Yields hit highest since 2002
Yields on 10-year notes and 30-year bonds hit their highest since 2002, at 5.32% and 5.66% respectively, a day after benchmark Treasuries logged their worst quarter since 1994. Efforts by the Treasury Department to halt the selloff by increasing long-term bond buybacks have not helped much, as developed markets in Europe and Japan come under the grip of debt worries.
Stock moves over the past few weeks have tracked bond yields closely as traders weigh the Federal Reserve's policy path against higher energy costs tied to the Middle East conflict, which have added to price pressures.
Micron's forecast reassures chip investors
Micron forecast quarterly revenue above market expectations and said customers had increased commitments under its supply agreements to $32 billion. The stock still dipped about 1% in premarket trading, reflecting elevated investor expectations after its shares more than tripled this year.
Lam Research and Applied Materials each added 1.8%, while Nvidia and Advanced Micro Devices gained about 1% each. Alphabet advanced 2.3% after announcing its Gemini 4 flagship AI model.
Futures point to a mixed open
At 04:48 a.m. ET, Dow E-minis were down 267 points, or 0.52%, and S&P 500 E-minis were down 1.5 points, or 0.02%. Nasdaq 100 E-minis were up 88 points, or 0.29%. The CBOE's VIX index hit a two-week high, last at 16.84 points.
Wall Street had a rocky September, with the S&P 500 and Dow logging monthly declines in what has historically been a weak month for equities. AI enthusiasm, however, helped the Nasdaq post gains for the month.
Rate-hike odds narrow after inflation data
Wednesday's softer-than-expected inflation data tempered expectations of a rate hike later this month. Traders now see a 63% chance of a hold, according to the CME Group's FedWatch Tool. But with the indicator still above the 2% central bank target, a December rate hike is still on the cards.
Commentary from policymakers including Thomas Barkin, Christopher Waller, Philip Jefferson, Michelle Bowman and Lorie Logan could offer markets more insight into the policy path. A weekly report on jobless claims and the Institute for Supply Management's manufacturing indicator are due later in the day.
Source: Economy News
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