US stock futures traded lower on Sept. 15 as markets waited for the Federal Reserve’s rate decision later this week and Treasury yields continued to climb.
Before the open, S&P 500 futures were down 0.3%, Nasdaq 100 futures fell 0.3%, and Dow futures dropped about 229 points, or 0.4%.
10-year Treasury yield rises above 5%
The yield on the 10-year US Treasury briefly touched 5.041%, the highest level since 2007, moving back up to and through the closely watched 5% mark.
Barclays strategists said a 10-year yield near 5% has been an important turning point historically. They added that if yields move higher from here, rates could put more sustained pressure on US equity valuations.
Oil extends gains as inflation worries build
Oil prices also moved higher, driven by the ongoing conflict between the United States and Iran and concerns about energy supply.
Brent crude futures rose as much as 1.8% to $107.55 a barrel, while WTI crude gained nearly 2% to $103.36 a barrel.
Markets are concerned that higher oil prices could add to inflation pressure and force global central banks to maintain or shift toward a more hawkish policy stance.
Fed decision in focus, AI sector remains weak
Fed funds futures currently imply about a 92% chance of a 25-basis-point rate increase on Wednesday, which could bring the target rate range to 3.75% to 4%.
At the same time, AI-related shares remained under pressure. NVIDIA fell about 3%, Corning dropped 13%, and the AI Innovation & Technology ETF lost nearly 4%.
Bessent set for House hearing
US Treasury Secretary Bessent is scheduled to appear before the House Financial Services Committee on Tuesday, where he is expected to face questions on inflation, energy prices, interest rates and federal debt.