Traders work on the floor of the New York Stock Exchange in New York on September 16, 2026.Timothy A. Clary | AFP | Getty Images Stock futures were steady early Thursday after rising Treasury yields sparked a market sell-off and traders anticipated rate hikes from the Federal Reserve. S&P 500 futures fell 0.31%. Nasdaq-100 futures fell 0.34%. During the regular trading day, the S&P 500 fell 0.8%. The Nasdaq Composite lost 1.1% and snapped a four-day winning streak. In Asia-Pacific, Japan’s Nikkei 225 added 1% after three consecutive days of holiday, while the Topix fell 0.09%. The Australian benchmark S&P/ASX 200 index fell 0.76%. South Korean markets are closed for holidays. Hong Kong’s Hang Seng Index fell 0.52%, while mainland China’s CSI 300 fell 1.29%. The yield on the benchmark 10-year Treasury bond, which is tied to mortgage rates, rose to 5.135%, its highest level since July 2007. The yield on the 2-year bond rose to 4.947%, its highest level since May 2024. This led to market anticipation of further rate hikes by central bank policymakers. Fed funds futures trading suggests a greater than 68% chance that the policy-setting Federal Open Market Committee will raise its key rate once again in October, according to the CME FedWatch tool. That compares to a chance of about 49% just a week ago. Higher yields tend to squeeze consumers’ finances as they face higher borrowing costs at a time when they are already paying more in fuel costs. Oil prices rebounded on Wednesday. International Brent crude futures rose about 3.9% to settle at $103.08 a barrel, while West Texas Intermediate crude gained 1.8% to $92.16. Readings from S&P Global’s manufacturing and services purchasing managers’ indexes suggested U.S. businesses continue to boom. BMO Capital Markets said in a note Wednesday that even if the results were strong, “severe supply chain bottlenecks,” as well as higher fuel and transportation prices, could drive inflation higher. “Overall, it was a much stronger-than-expected reading on U.S. business activity, implying ample room for both policy rates and Treasury yields to rise in the near term,” said Vail Hartman, U.S. rates strategist at BMO. “If anything, the data reinforces the risk of a further acceleration in demand-driven inflation, even if supply-side inflation declines.” Heading into Thursday, traders will be keeping an eye on weekly jobless claims for more details on the state of the economy. On the earnings front, they’ll also be looking for quarterly results from Olive Garden parent Darden Restaurants in the morning and big-box retailer Costco Wholesale in the afternoon.
