Stock futures fell slightly on Sunday night following a winning week despite Treasury yields spiking to multiyear highs.
Dow Jones Industrial Average futures pulled back 97 points, or 0.2%. S&P 500 futures lost 0.2% along with Nasdaq-100 futures.
A rise in oil prices weighed on equity futures in early trading. Brent crude traded more than 1% higher at $105.86 per barrel. West Texas Intermediate futures gained around 1% as well to $93.20, after President Donald Trump rejected conditions for a ceasefire presented by Iran.
The Dow eked out a 0.3% advance last week, snapping a three-week slide. The S&P 500 and Nasdaq Composite had their best weekly performances since early August, advancing 1.2% and 2.1%, respectively.
Tech-linked stocks led the way last week. Meta Platforms rallied nearly 13% in that time, as traders cheered the company's Muse artificial intelligence agent. Microsoft climbed more than 4%, while Apple and Nvidia advanced more than 1% each.
Those gains came even as Treasury yields raced to highs not seen in years, with traders increasing bets of more Federal Reserve rate hikes due to persistent inflation. The benchmark 10-year Treasury note yield scaled to a level not seen since 2007. The 30-year bond yield reach a 2004 high. The 2-year note yield also jumped around 17 basis points last week.
"The rapid rise in 2-year government note yields worldwide signals that major central banks need to raise their policy rates further in response to the inflationary impact of higher-for-longer oil prices resulting from the recent re-escalation of the Middle East war," wrote Ed Yardeni, president of Yardeni Research. "Unfortunately, these higher rates also exacerbate the outlook for large government deficits worldwide."
Rates will be in focus again this week, with a slew of key economic data on deck. The August personal consumption expenditure price index, the Fed's preferred inflation gauge, is due out Wednesday. New U.S. manufacturing numbers are due Thursday, while the closely watched September jobs report is set for release Friday.
51 Min AgoAI companies face increased risk as bond yields spike
With Treasury yields climbing this week to their highest levels since 2007, companies reliant on debt are poised to see their borrowing costs rise. That means the AI infrastructure buildout, which has already reached historic levels, is about to get even more expensive.
JPMorgan Chaseestimated in June that $4.1 trillion in AI-related debt will be issued through 2030, as data center companies and others tied to the artificial intelligence boom race to build up capacity to meet what many industry experts view as insatiable demand for AI services.
As borrowers go back to the market, they're now looking at a 10-year Treasury yield that sits near 5.17%, up about 1 percentage point since the start of the year, meaning companies issuing debt are going to have to offer more attractive rates of return to lure investors.
The market isn't in panic mode, at least not yet.
— Kif Leswing, Isabel O'Brien, Seema Mody
1 Hour AgoWall Street money takes back over from small investors
Institutional investors are taking the wheel in the stock market.
After years on a big buying streak, retail traders appear to be moving to the sidelines. At the same time, data from Vanda Research shows that big investors have held steady on stocks in the face of spiking Treasury yields.
"Institutional investors have been surprisingly resilient through this week's macro volatility," Viraj Patel, global market strategist at Vanda, wrote to clients on Friday.
— Alex Harring
1 Hour AgoStock futures open lower
Dow Jones Industrial Average futures pulled back 106 points, or 0.2%. S&P 500 futures lost 0.2% along with Nasdaq-100 futures.
— Fred Imbert
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