U.S. 10-year Treasury yield hits highest level since 2023
U.S. stock futures fell Wednesday as the 10-year Treasury yield climbed to its highest level in nearly three years, with rising oil prices adding to concerns about inflation.
The 10-year Treasury yield reached 4.814% intraday, marking its highest point since November 2023. Dow Jones Industrial Average futures slipped 66 points, or 0.1%, while S&P 500 futures lost 0.2% and Nasdaq 100 futures fell 0.6%.
West Texas Intermediate crude surpassed $90 per barrel on Wednesday, a price not seen since late July, following U.S. military strikes against Iran. Brent crude futures stood at $94.62, approximately $20 above where they traded before the conflict began, stoking fears that sustained energy price pressure could complicate central bank policy.
Bond yields rose beyond the U.S. as well. Germany's 10-year yield reached 3.39%, a level that would represent the country's highest closing yield in a decade and a half. Borrowing costs in France and Japan also drifted higher.
"Higher yields are proving to be the stock market's undoing," Thierry Wizman, global foreign exchange and rates strategist at Macquarie Group, told CNBC . "They force analysts to discount higher earnings more aggressively, thus forcing [price-to-earnings] multiples downward."
Overseas equity markets fell broadly. Japan's Nikkei 225 ended the session down 2.85%, South Korea's Kospi lost 4%, Australia's S&P/ASX 200 retreated 0.97%, and mainland China's CSI 300 finished 1.38% in the red. European equities also weakened, with the pan-European Stoxx 600 off 0.49%; Germany's DAX lost 0.7%, the U.K.'s FTSE 100 and France's CAC 40 were each about 0.6% lower, and Italy's FTSE MIB gave up 0.5%.
Investors are watching several data releases and earnings reports Wednesday. On the data front, August ADP private payrolls, factory orders figures, and the Fed's Beige Book are all on the calendar, with quarterly results from Hewlett Packard Enterprise, Snowflake, and Broadcom set to follow once markets close.
