Stock Futures Rise Despite Record Highs in Long-Dated Treasury Yields

U.S. stock futures traded higher in the overnight session late Wednesday, moving against a backdrop of surging long-dated bond yields. As of 10:13 p.m. EDT, Dow futures were up 0.07%, S&P 500 futures had gained 0.32%, and Nasdaq-100 futures rose 0.44%. This advance occurred despite the 10-year U.S. Treasury yield climbing to a 24-year high, surpassing 5.3% to reach levels last seen in 2002. The 30-year Treasury bond yield also crossed multi-decade highs, trading at 5.652% at the time of writing.

The rise in yields has placed significant pressure on the bond market. Economist Peter Schiff noted in a post on X that the situation illustrates how bear markets function. Schiff observed that after an initial rally following lower-than-expected August personal consumption expenditures data, Treasuries sold off to new lows. He characterized the current environment as the early stage of what he believes will be the largest bond bear market in history.

On the equity side, Wednesday’s session ended with mixed results for the three benchmark indexes. The Dow Jones Industrial Average fell 0.86%, while the S&P 500 slipped 0.25%. The Nasdaq Composite climbed 0.24% at the close. For the month ended Sept. 30, the S&P 500 and Nasdaq indexes closed higher, whereas the Dow ended the month approximately 3.5% lower. Markets struggled during September with soaring oil prices and a surge in Treasury yields, which stoked fears of additional rate hikes from the Federal Reserve.

Wednesday's release of personal consumption expenditures data showed inflation running cooler than analysts had predicted. The Federal Reserve's preferred inflation measure accelerated at a 3.4% annual rate in August, missing the 3.7% consensus estimate, while core PCE rose 3%, also coming in below expectations. Investors are now turning their attention to initial jobless claims data due Thursday and the September jobs report due Friday.

Corporate news provided a mixed picture for individual stocks. Micron Technology reported fourth-quarter revenue of $54.23 billion, up 379%, with adjusted earnings per share reaching $33.42. The company also expects first-quarter revenue of about $61.5 billion. Despite these results, Micron shares were flat at close. Nike is expected to report its first-quarter earnings after the bell on Thursday.

Other stocks drew attention from retail investors. ImmunityBio shares broke above a key resistance level around $9.44 on Wednesday, extending a September rally that has positioned it for its strongest monthly gain since February. Constellation Energy announced a 20-year power purchase agreement with Amazon.com Inc., which will add 190 MW of nuclear capacity at Calvert Cliffs, Maryland.

Oil prices remained elevated, with Brent crude futures expiring in November trading at $103.53 a barrel and WTI crude futures at $90.35 per barrel. Among exchange-traded funds, the SPDR S&P 500 ETF, SPDR Dow Jones Industrial Average ETF Trust, and Invesco QQQ Trust all climbed higher overnight. Conversely, the iShares 20+ Year Treasury Bond ETF was down 0.57%. Asian markets opened mixed on Thursday, with South Korea's KOSPI trending lower while Japan’s Nikkei 225 and China’s SSE Composite climbed at the open.