Business 4 min read By Bethany Hadley
Dow Rises Ahead of Key Inflation Data as Bond Yields Pressure Markets
U.S. stock futures were mixed Monday as investors braced for a crucial inflation report and a Federal Reserve speech, while rising Treasury yields and tech stock declines weighed on sentiment.
U.S. stock futures pointed to a cautious start on Monday, with the Dow Jones Industrial Average edging higher while technology shares dragged on the Nasdaq. Investors were looking ahead to a key inflation report and a speech from a Federal Reserve governor later this week, even as bond market pressures persisted.
Futures for the S&P 500 were down 0.2%, while Dow futures slipped 0.1% and Nasdaq futures fell 0.7%. On Friday, the S&P 500 had risen 0.4%, marking just its second gain in six sessions since hitting an all-time high last week. The mixed start came as Treasury yields remained elevated, with the 10-year yield hovering near its highest level in over a year at around 4.72%.
The bond market has been a focal point after the Treasury Department announced it would double its buybacks of longer-term bonds in an effort to bring down borrowing costs. The move, announced by Treasury Secretary Scott Bessent, provided only temporary relief, as the 10-year yield rose back to 4.73% on Friday. The 30-year yield also climbed, nearing its highest level since 2007. Higher yields can slow economic growth and undercut investment prices, raising concerns about the impact on consumer spending.
Investors are now turning their attention to Wednesday, when the U.S. releases its July personal consumption expenditures (PCE) report, the Federal Reserve’s preferred inflation gauge. Like the consumer price index, PCE has shown inflation running stubbornly above 3%, well above the Fed’s 2% target. The Commerce Department will also issue its second estimate of second-quarter GDP, which is expected to confirm sluggish growth of around 1.5% as rising imports weighed on the economy.
In the tech sector, shares of Sandisk dropped 5%, while Micron Technology slipped 3% and Coherent fell more than 5%. Corning also declined 3%. The losses reflected ongoing volatility in semiconductor and hardware stocks, which have been sensitive to interest rate expectations and global demand concerns.
Oil prices declined on Monday, with Brent crude falling 1.7% to $91.06 per barrel and U.S. benchmark crude dropping 2.2% to $85.18. The pullback came as Iran’s currency hit a record low ahead of expected new U.S. sanctions, though uncertainty over the conflict in the region continued to keep markets on edge. The price of oil has risen sharply over the past year, with Brent up more than 38% from a year ago.
In Europe, Germany’s DAX edged down slightly to 26,133.59, while France’s CAC 40 gave up 0.1% to 8,480.49. Britain’s FTSE 100 inched up 0.2% to 10,839.52. Asian markets also declined. The dollar strengthened against the yen, buying 159.23 yen, while the euro slipped to $1.1665.
Federal Reserve Governor Kevin Warsh is scheduled to speak at the annual Jackson Hole economic symposium later this week, and investors will be watching for signals on interest rates and monetary policy. The Fed has been struggling to bring inflation back to target, with price pressures exacerbated by global tariffs and disruptions to oil shipments from the Strait of Hormuz.
