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Stock futures are little changed as Dow heads for fourth straight losing week

1 d ago

U.S. equity futures were little changed Thursday evening as Treasury yields continued their climb, with the 10-year yield reaching its highest level since 2007, signaling ongoing market volatility and heightened expectations of a Federal Reserve rate hike in October. S&P 500 futures and Nasdaq-100 futures each dipped 0.1%, while Dow Jones Industrial Average futures fell 59 points, or 0.1%, after the S&P 500 and Nasdaq Composite finished flat in regular trading. In Asia-Pacific, Japan's Nikkei 225 was poised for a slight rise, with Chicago futures at 65,585, while Hong Kong's Hang Seng index futures traded at 24,627, below the index's last close of 24,761.13. Australia's S&P/ASX 200 futures last traded at 8,709, versus a close of 8,702. The bond market drama intensified as the 10-year Treasury yield climbed to 5.225% late Thursday, the highest since 2007, and the 30-year yield reached 5.502%. This week's yield ascent was fueled by hawkish comments from Federal Reserve Governor Michael Barr, persistently high energy prices due to the Iran war, and a hot purchasing managers' report. Fed funds futures trading suggests a roughly 68% likelihood of a rate hike in October, according to the CME FedWatch tool. The 30-year fixed-rate mortgage, which tracks the 10-year note, rose to 7.45%, the highest level since 2024, increasing borrowing costs ahead of the midterm elections. Morgan Stanley economist Heather Berger noted that declines in credit card APR and auto loan rates have stalled, and mortgage rates reaccelerated, expecting these pressures to weigh on spending and contribute to a 40 basis point deceleration in real consumption growth next year. The Dow is heading for a fourth consecutive losing week, down 0.6% in the period, while the S&P 500 is on track for a 0.7% advance and the Nasdaq is up 1.6% week to date. Traders will eye the University of Michigan consumer sentiment report and durable goods data on Friday.