Wall Street Under Pressure; Oil and Bonds Weigh on Markets
US stock futures weakened during Thursday's trading as US government bond yields rose again, reversing a decline from the previous session. This pressure followed market scrutiny of the US Treasury Department's announcement regarding a debt buyback plan.
Dow Jones Industrial Average futures fell 439 points, or 0.8%. Meanwhile, S&P 500 futures declined 0.4% and Nasdaq-100 futures dropped 0.6%, signaling a return to investor caution regarding risk assets.
US Treasury yields climbed again after easing on Wednesday. The 10-year yield rose more than 5 basis points to 4.704%, while the 30-year yield increased 6 basis points to 5.254%. These gains followed the 30-year yield touching a nearly 20-year high earlier in the week.
Negative sentiment was also driven by rising oil prices resulting from escalating US-Iran tensions. President Donald Trump stated that the US would launch a major economic operation against Iran, describing it as economic warfare and isolation on an unprecedented scale.
Oil prices surged following the statement. West Texas Intermediate (WTI) futures rose 3% to above US$88 per barrel, while Brent crude gained 3% to surpass US$94 per barrel. The rise in oil prices reignited concerns regarding energy inflation and the Federal Reserve's interest rate policy.
Additional pressure came from Walmart shares, which fell more than 6% after US comparable sales missed analysts' expectations. Regarding market impact, the combination of rising yields, oil prices, and geopolitical tensions could stall the US stock rally in the short term. If long-term yields continue to rise, technology stocks and interest-rate-sensitive sectors could face renewed pressure.
Source: Newsmaker.id
