US equity markets came under renewed pressure on Thursday as climbing oil prices and persistently high Treasury yields pushed investors away from risk assets and raised questions about how long the recent record-breaking rally can continue.
Before the opening bell, Dow futures tumbled 482 points, or 0.94%, while S&P 500 futures lost 0.57% and Nasdaq 100 futures fell about 0.83%. At the open, the Dow was down 127 points, the S&P 500 declined 0.28%, and the Nasdaq Composite dropped 0.48%, extending Wednesday's pullback from record highs.
The main pressure came from energy and fixed income markets. Brent crude rose about 4.2% to trade above $104 per barrel as Middle East supply risks intensified, including attacks on shipping near the Gulf and potential disruptions around the Strait of Hormuz. West Texas Intermediate climbed roughly 4% to around $92. A Gulf of Mexico storm also forced Shell and Chevron to halt some production. Meanwhile, the benchmark 10-year Treasury yield initially rose to 5.35%, near its highest level since 2002, before easing to 5.28%. The 30-year yield hit roughly 5.73%, a 24-year high, before falling to 5.66%.
Federal Reserve Governor Christopher Waller added to the cautious tone by saying additional interest-rate increases would probably be needed to bring inflation back toward the central bank's 2% target, even as policymakers retain flexibility on timing. Higher energy costs complicate that inflation path and reinforce the market's higher-for-longer interest-rate concerns.
Corporate news was mixed. TSMC reported third-quarter revenue of about $46.7 billion, up 50% from a year earlier, signaling still-strong AI-related chip demand, but semiconductor shares still slipped. Amazon confirmed another round of corporate layoffs affecting fewer than 1,000 employees. PepsiCo beat quarterly estimates but lowered its core profit-growth outlook. Palantir rose about 4% after a Goldman Sachs upgrade, and Wolfspeed gained 4.88% after a $1.5 billion conditional loan commitment from the US Department of Defense.
The combination of elevated yields, firmer oil, and pre-earnings caution creates a challenging backdrop for speculative assets, including cryptocurrencies, which tend to react negatively when liquidity expectations tighten and risk appetite fades.
