U.S. equity futures opened lower on Thursday following a modest pullback in the S&P 500 from its all‑time peak reached the day before. The Dow Jones Industrial Average futures slipped 132 basis points, roughly 0.26%, while S&P 500 futures were down about 0.15% and Nasdaq‑100 futures fell 0.21%.
Yield Spike and Treasury Activity
Bond markets saw yields climb to levels not seen in decades, a development that helped push equity futures lower. The Treasury Department sold $39 billion of 10‑year notes on Wednesday, attracting strong demand from indirect bidders, including foreign central banks, which accounted for more than 80% of the auction—well above the ten‑auction average of 72.4%. The sizable sale contributed to a modest easing of the 10‑year Treasury yield from its 24‑year high earlier in the session.
Despite the easing, the 10‑year yield was last reported 4 basis points higher at 5.3178%, and the 30‑year Treasury yield rose an equal 4 basis points to 5.7064% as the Treasury prepared to issue $22 billion of 30‑year bonds later Thursday.
Global Market Reactions
Asian equity indices mirrored the U.S. weakness. Japan’s Nikkei 225 dropped 1.12%, South Korea’s Kospi fell 2.04%, and Australia’s S&P/ASX 200 slipped 0.64%. In mainland China, the CSI 300 declined 0.43%, while Hong Kong’s Hang Seng Index was down 0.69%.
Higher yields have been dampening investor appetite for stocks, particularly in sectors sensitive to borrowing costs. Industrials emerged as the poorest‑performing sector for the week, reflecting the broader pressure from elevated financing rates.
Outlook Ahead of Earnings and Economic Data
Despite the recent pullback, many market participants remain optimistic that the start of earnings season could provide fresh momentum. FactSet projects the S&P 500 to deliver a blended earnings growth rate of roughly 30% in the third quarter, marking a third consecutive quarter of earnings expansion exceeding 25%.
“If earnings remain strong, and the idea is that they probably will, if expectations are met and/or higher, that is going to sustain this rally — despite the fact that rates are higher,” said Courtney Garcia, senior wealth advisor at Payne Capital Management, during an interview on CNBC’s “Closing Bell.” She added that robust earnings could prevent higher rates from derailing the market’s upward trajectory.
Investors will also be watching corporate results, beginning with PepsiCo’s earnings release before the market opens on Thursday. In addition, the weekly jobless claims report is slated for release later in the day, offering further insight into the health of the labor market.
On the corporate front, Levi Strauss & Co. saw its shares dip nearly 2% in extended trading after the denim maker lowered its full‑year revenue growth guidance while simultaneously raising its profit outlook. The mixed guidance underscores the nuanced impact of higher borrowing costs on individual companies.
Helene Elliott is the Lead Science & Space Reporter at News Raise. She reports on aerospace missions, astrophysics discoveries, quantum research, and environmental technology.
