US Futures Slide as Bond Yields and Fed Minutes Weigh on Markets
US futures started the week on a downtrend as bond market pressures and anticipation of the Federal Reserve's meeting minutes weighed on investor sentiment. Futures for the S&P 500 and Dow Jones Industrial Average both fell by 0.2%, while Nasdaq futures dropped 0.3%. Rising bond yields, driven by persistent inflation, high oil prices, and strong economic data, have made borrowing more expensive, impacting stock prices.
The yield on the 10-year US Treasury reached 5.27%, and the 30-year Treasury yield hit 5.63%, both surging to over 20-year highs. This has heightened interest in the Fed's September meeting minutes, set to be released Wednesday, which may provide clues about future interest rate hikes. The week will also see key economic indicators, including data on the US services sector, unemployment, and consumer sentiment.
In corporate news, RXO Inc. shares surged over 20% after C.H. Robinson Worldwide announced a $5.8 billion cash-and-stock deal to acquire the company. The merger comes amid rising surcharges in the freight and logistics industry due to inflation and high diesel prices. Meanwhile, Skydance-owned Paramount and Warner Bros. Discovery are expected to finalize their $81 billion merger on Tuesday, forming Skydance Corporation with the ticker “SKYD.”
Energy markets saw mixed movements, with US crude dipping 0.5% to $90.68 a barrel, while Brent crude rose 0.7% to $102.91 a barrel. Oil prices have fluctuated due to uncertainty surrounding the war with Iran and its impact on global oil supply. In Europe, France's CAC 40 fell 0.8%, Germany's DAX rose 0.1%, and Britain's FTSE 100 climbed 0.3%. Asian markets were higher, with the US dollar strengthening against the yen and the euro.