Trade Truce Extension Falls Short as US-China Tensions Persist

The US and China extended their trade truce by only two months past its November 10 expiration, failing to meet market expectations for a longer extension. The news came as major indexes fell for a second straight session on Thursday.

The Dow Jones Industrial Average dropped 0.6%, while the S&P 500 slipped 0.5%. Meanwhile, the Nasdaq Composite declined 0.8% by late morning. Eighteen of the Dow's 30 components traded lower, with Goldman Sachs and Caterpillar contributing significantly to the decline.

The Treasury yield touched a 2004 high of 5.446%, and mortgage rates soared to a multi-year peak of 7.1%. The FedWatch odds of an October rate hike now stand at 71%, up from roughly 55% a week ago. Crude oil prices jumped 1% as the global economy faces increased uncertainty.