Nasdaq futures indicated a significant decline on Thursday, following a market selloff, as Treasury yields persisted in their upward trajectory. Meanwhile, President Donald Trump is scheduled to engage in discussions with Chinese leader Xi Jinping today in Washington. Futures for the Nasdaq 100, S&P 500, and Dow Jones Industrial Average experienced declines of 0.9%, 0.5%, and 0.3%, respectively, in recent trading. Yesterday, the Nasdaq Composite experienced a decline following two consecutive days of record closings, while the S&P 500 and Dow Jones Industrial Average also finished significantly lower, coinciding with Treasury yields reaching a 19-year peak.
The 10-year Treasury yield, a key indicator for various interest rates such as mortgages, corporate bonds, and other loans, was approximately 5.3% in recent trading, reflecting an increase of nearly two basis points from Wednesday’s close and marking its highest level since 2007. Yesterday, the yield surged by over 14 basis points following the release of manufacturing data that exceeded expectations, intensifying traders’ concerns regarding a prolonged cycle of interest rate increases. Traders are currently assigning a 75% probability to the Federal Reserve increasing interest rates by a quarter-percentage point at its upcoming meeting, a notable rise from the 55% observed just one week prior. At an event in London Thursday, New York Fed President John Williams stated that it would be a “reasonable” expectation for another rate hike this year.
Additionally, elevated oil prices are contributing to the rise in Treasury yields, as traders do not anticipate a swift resolution to the U.S.-Iran conflict. U.S. benchmark West Texas Intermediate prices increased by 1.3% to $93.35 a barrel in recent trading, whereas Brent crude futures, the international benchmark, rose by 1.7% to $104.80. Today, investors will be monitoring developments from the Trump-Xi summit. Last nite, Treasury Secretary Scott Bessent announced that the United States and China will prolong their tariff truce by an additional two months, extending it until January 10. Trump and Xi are anticipated to engage in discussions regarding artificial intelligence during their meeting today. Roundhill’s Memory ETF and the broader iShares Semiconductor ETF pointed down 1.5% and 2%, respectively, with shares of chipmaker Intel about 3% lower in heavy premarket trading.
Shares of Magnificent Seven mega-cap tech stock Meta Platforms, which hit a 52-week high yesterday, fell 2% before the bell after CEO Mark Zuckerberg and other executives introduced new AI products at the company’s Connect developer conference. The Roundhill Magnificent Seven ETF pointed more 1% lower. Costco Wholesale shares ticked higher ahead of the company’s earnings report after markets close today. Stitch Fix stock experienced a significant decline of 20% after the release of its report late yesterday. Bitcoin was trading at approximately $83,400, a decline from the overnight peak of about $84,700. The U.S. dollar index, which monitors the value of the greenback relative to a selection of foreign currencies, registered an increase of 0.2%, reaching 101.24. Gold futures declined by 0.5%, settling at $4,295 per ounce.
