Dow futures gained 199 points, or 0.4%, on Friday, but the index remains on track for its fourth straight losing week, down 0.6% through Thursday's close. A surge in Treasury yields, fueled by hawkish Fed comments and persistently high energy prices, rippled through financial markets, while oil slid on optimism over a possible Iran diplomatic deal.
Futures tied to the Dow Jones Industrial Average gained 199 points, or 0.4%, Friday, but the index remains on track for its fourth consecutive losing week, down 0.6% through Thursday's close, as a surge in Treasury yields ripples through financial markets.
Treasury yields drive the week's losses
The 10-year Treasury yield climbed to 5.225% late Thursday, its highest level since 2007, while the 30-year yield reached 5.502%. This week's ascent in yields was fueled by hawkish comments from Federal Reserve Governor Michael Barr, persistently high energy prices tied to the Iran war, and a hot purchasing managers' report. Fed funds futures trading suggests a roughly 66% likelihood of a rate hike in October, according to the CME FedWatch tool.
Higher yields are also pushing up borrowing costs. The 30-year fixed rate mortgage, which tracks the 10-year note, rose to 7.45%, the highest level since 2024, with consumer borrowing costs poised to increase ahead of the midterm elections.
Oil slips as Iran talks progress
Oil prices slid amid optimism that the Strait of Hormuz could reopen, after Iran's Foreign Minister Abbas Araghchi proposed doing so and restarting nuclear talks with the U.S. within seven days if Washington accepts its conditions. West Texas Intermediate crude futures dropped 2% to around $92 a barrel. Brent crude futures declined 1% to around $104 a barrel.
Reuters reported that U.S. and Iranian negotiators in New York are considering a phased agreement to end the Middle East conflict.
Elsewhere, S&P 500 futures rose 0.4% and Nasdaq-100 futures advanced 0.7%. The S&P 500 is on track for a 0.7% weekly advance. The Nasdaq is up 1.6% week to date. Akamai Technologies jumped more than 19% in premarket trading after announcing a multi-year deal with Anthropic, lifting other technology stocks.
Source: CNBC
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