U.S. stock futures fell Tuesday as Treasury yields and oil prices jumped.
Why it matters: Higher yields can raise borrowing costs for companies and weigh on stock valuations. Rising oil prices can also keep inflation expectations elevated and complicate the Fed outlook.
- CNBC said Dow futures were down about 200 points at the start of September.
- AP said the U.S. 10-year Treasury yield was near 4.78% to 4.80% in early trading.
- Reuters said Brent crude rose above $90 a barrel.
- Reuters reported Japan's 10-year government bond yield hit 3% for the first time since 1996.
Wall Street started September under pressure Tuesday as higher bond yields and oil prices hit risk appetite. CNBC reported Dow futures fell about 200 points at the open.
The bond move was notable in the U.S. and Japan. AP said the U.S. 10-year Treasury yield was near 4.78% to 4.80% in early trading. Reuters reported Japan's 10-year government bond yield hit 3% for the first time since 1996.
Energy prices added to the pressure. Reuters said Brent crude rose above $90 a barrel after renewed fighting in the Middle East, a move that can keep inflation expectations elevated.
For investors, the combination matters because higher yields can undercut stock valuations and make financing more expensive for companies. Oil strength can also keep pressure on sectors sensitive to fuel costs and consumer spending.
By the numbers
- 200 points - Dow futures decline reported by CNBC at the start of September.
- 4.78%-4.80% - Where AP said the U.S. 10-year Treasury yield traded in early September trading.
- $90 a barrel - Level Brent crude rose above, according to Reuters.
Yes, but: The bond and oil moves may not persist if markets reassess growth, inflation or geopolitical risk.
What's next: Investors will watch whether Treasury yields and oil stay elevated as September trading unfolds.