Futures Pointing To Extended Pullback On Wall Street

The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to extend the pullback seen during Wednesday’s session.

The downward momentum on Wall Street comes as the Treasury yields are moving modestly higher following the surge seen in the previous session.

The yield on the benchmark ten-year note has inched up to its highest level since July 2007, while the thirty-year bond yield has reached its highest level since 2004.

Treasury yields are moving higher amid an extended rebound by the price of crude oil, with U.S. crude oil futures surging by nearly 2 percent after jumping by 1.8 percent on Wednesday.

Traders are looking for signs of progress in talks between the U.S. and Iran after optimism about an end to the prolonged Middle East conflict contributed to a sharp pullback by crude oil prices early in the week.

The rebound by crude oil prices comes after conflicting speeches by President Donald Trump and Iranian President Masoud Pezeshkian at the UN General Assembly.

Trump threatened to “annihilate” Iran in his remarks, while Pezeshkian condemned what he called “signs of a bullying mentality” from the U.S. and said that Iran would never surrender.

Meanwhile, Trump and Chinese President Xi Jinping will be meeting at the White House later today, with trade, artificial intelligence and critical minerals on the agenda.

U.S. stocks spent all of Wednesday’s session underwater, thanks to a rebound in crude oil prices that followed comments a day earlier from U.S. President Donald Trump.

The major averages opened in the red on Wednesday and continued to trend lower throughout the session, ending at daily lows.

The Dow sank 352.10 points or 0.7 percent to finish at 51,511.59, while the Nasdaq slumped 308.24 points or 1.1 percent to close at 26,936.04 and the S&P 500 shed 58.61 points or 0.8 percent to end at 7,706.03.

Speaking before the United Nations General Assembly on Tuesday, Trump said that a deal with Iran may be possible after the midterm elections but said that he may instead just decide to “annihilate the Islamic Republic.” He also spoke of setting up a “large military presence” on Greenland.

Stocks slumped in reaction and the losses accelerated on Wednesday as oil prices rebounded, stoking inflation concerns and the possibility of another interest rate hike from the Federal Reserve.

Crude oil prices snapped a five-day losing streak on Wednesday as prices climbed thanks to ongoing concerns about the Middle East conflict.

Gold prices fell again on Wednesday as the U.S. dollar stayed firm amid bets the Federal Reserve will announce another hike in interest rate this year.

In U.S. economic news, the preliminary manufacturing, services and composite PMIs for September from S&P Global all came in above expectations.

Also, data from the U.S. Energy Information Administration showed a build of almost 3 million barrels in crude inventories last week when a significant drawdown was expected.

Commodity, Currency Markets

Crude oil futures are surging $1.69 to $93.85 a barrel after jumping $1.64 to $92.16 a barrel on Wednesday. Meanwhile, after slumping $58 to $4,318.40 an ounce in the previous session, gold futures are falling $17.10 to $4,301.30 an ounce.

On the currency front, the U.S. dollar is trading at 158.74 yen versus the 158.29 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1367 compared to yesterday’s $1.1380.

Asia

Asian stocks retreated on Thursday, even as Japan’s stocks rose notably as Tokyo markets reopened after a three-day holiday.

A cautious undertone prevailed after oil prices rose sharply overnight and U.S. bond yields jumped to their highest levels in nearly two decades on inflation concerns stemming primarily from surging global energy prices amid the prolonged Middle East conflict.

The U.S. dollar index clung to a two-month high as a strong manufacturing reading prompted traders to reprice their rate-hike bets.

Markets currently price in a 71 percent chance of a Federal Reserve rate hike next month, according to the CME’s FedWatch tool.

The U.S. 10-year Treasury yield held steady after reaching the highest since 2007 overnight.

Gold was subdued below $4,300 an ounce, while Brent crude prices traded above $103 a barrel, after having surged 4 percent in the previous session due to heightened uncertainty surrounding U.S.-Iran negotiations.

China’s Shanghai Composite Index slumped 1.2 percent to 3,888.37, with technology stocks coming under renewed selling pressure ahead of the closely watched Trump-Xi summit. Hong Kong’s Hang Seng Index dipped 0.3 percent to 24,761.13.

After an unscheduled meeting with Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent announced the extension of the Busan trade truce from November 10 to January 10, easing the immediate risk of a renewed escalation in tariffs between the world’s two largest economies.

Japanese markets closed notably higher as gains in chip-related shares outweighed concerns over climbing bond yields and oil prices.

Japanese 10-year government bond yield rose to a 30-year high today following the Bank of Japan’s policy rate increase to 1.25 percent and a surge in U.S. Treasury yields.

The Nikkei 225 Index advanced 0.8 percent to 65,513.99 as trading resumed after a three-day holiday. The broader Topix Index settled 0.39 percent lower at 4,075.30.

Ibiden shares soared 14.6 percent and Socionext jumped 15 percent after Meta’s new personal AI agent Muse made an unusually strong consumer debut and Alibaba unveiled a new processor for artificial intelligence, calling it the most powerful Chinese AI chip.

Seoul markets were closed for Chuseok Thanksgiving Day holiday. Australian markets fell notably after labor market showed mixed signs in August, with employment growth exceeding expectations and the jobless rate climbing to a five-year high.

The benchmark S&P/ASX 200 dropped 0.7 percent to 8,702 ahead of the Reserve Bank of Australia’s Sept. 29 policy decision, with markets factoring in a 25-bps rate hike. The broader All Ordinaries Index ended 0.7 percent lower at 8,897.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index finished marginally higher at 13,824.83 following losses in the previous session.

Europe

European stocks have drifted lower on Thursday as Brent crude futures held above the key $100-per-barrel level amid ongoing Middle East tensions and hawkish Federal Reserve commentary raised expectations of another Fed rate hike.

Meanwhile, U.S. President Donald Trump and Chinese President Xi Jinping will be meeting at the White House later today, with trade, artificial intelligence and critical minerals on the agenda.

Ahead of the crucial talks, U.S. Treasury Secretary Scott Bessent announced the extension of the Busan trade truce from November 10 to January 10, easing the immediate risk of a renewed escalation in tariffs between the world’s two largest economies.

The French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 0.2 percent, although the U.K.’s FTSE 100 Index has bucked the downtrend and inched up by 0.1 percent.

Mercedes-Benz has moved notably lower following reports that the automaker plans to cut €800 million in labor costs in Germany.

Renault, Volkswagen and BMW have also fallen despite EU new passenger car registrations rising 4.5 percent year-on-year in August.

French biotechnology company Carbios has also tumbled 3 after posting a net loss of 9.43 million euros in the first half of the year.

Swedish fashion retailer H&M has also slumped despite reporting a bigger-than-expected increase in third-quarter operating profit.

Johnson Matthey has also fallen. The British specialty chemicals and sustainable technologies company said it would commence a share repurchase program to buy back up to a maximum consideration of £200 million common shares.

Meanwhile, Shelly Group shares have surged after Schneider Electric announced that it intends to launch a €1.2 billion ($1.4 billion) bid to acquire the Bulgarian smart-home device maker.

U.S. Economic News

First-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended September 19th, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims slipped to 197,000, a decrease of 1,000 from the previous week’s revised level of 198,000.

Economists had expected jobless claims to rise to 204,000 from the 196,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average also dipped to 202,250, a decrease of 1,750 from the previous week’s revised average of 204,000.

At 10 am ET, the Commerce Department is scheduled to release its report on new home sales in the month of August. New home sales are expected to increase to an annual rate of 615,000 in August from an annual rate of 607,000 in July.

Philadelphia Federal Reserve President Anna Paulson is due to deliver opening remarks and participates in a “Fintech Evolution: Looking a Decade Back and a Decade Forward” discussion before the 10th Annual Fintech Conference at 10:10 am ET.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $44 billion worth of seven-year notes.