U.S. 10-year Yield Rose Toward a 15-year High

Good morning.

Stock futures are down this morning as the benchmark U.S. 10-year yield rose toward a 15-year high, while market participants looked ahead to the release of the Fed’s favorite inflation gauge as well as speeches from Fed officials.

The S&P 500 and the Nasdaq registered their largest weekly percentage drop since March on Friday as benchmark Treasury yields hit multi-year highs while investors digested the Fed’s hawkish outlook revisions. Included is last week’s S&P 500 Heat Map.

Fed Governor Michelle Bowman indicated Friday that she leans towards increasing interest rates again. “I continue to expect that further rate hikes will likely be needed to return inflation to 2% in a timely way,” Bowman said. Also, Boston Fed President Susan Collins said that further interest-rate hikes were “certainly not off the table.”

Investors will monitor data on durable goods and the Fed’s preferred inflation gauge Personal Consumption Expenditures (PCE) price index for August, second-quarter GDP, and remarks by Fed policymakers including Chair Jerome Powell through the course of the week.

On the earnings front, notable companies like Micron Technology, Costco, Nike, and Carnival are slated to release their quarterly results this week.

Media firms Warner Bros Discovery, Paramount Global, Netflix and Walt Disney gained between 0.8% and 4% after Hollywood’s writers union reached a preliminary labor agreement with major studios on Sunday. HP Inc fell 2.4% after Warren Buffett’s Berkshire Hathaway sold nearly 4.8 million shares of the PC-maker.

WTI crude futures rose above $90.5 per barrel. Gold hovered below $1,930 an ounce while the yield on the US 10-year Treasury note rose above 4.48%.

Have a great day.