US Futures Flatline | US 10 Year Treasury 4.6%

Good morning,

US stock futures swung around the flatline on Thursday, as traders assessed the impact of soaring oil prices and the potential for inflation.

The scope for interest rates staying higher for longer than anticipated has only solidified with soaring energy prices keeping headline inflation elevated. Deepening such concerns, U.S. oil futures jumped to a more than one-year high on Thursday. Riding on the back of higher crude prices, energy is set to emerge as the only major S&P 500 sector to notch monthly gains. Meanwhile, rate-sensitive information technology and real estate were on track to be the worst hit.

The S&P 500 and the Nasdaq are set for their worst monthly showing so far this year as Treasury yields embarked on a path to multi-year highs on uncertainty around the interest rates trajectory. All the three indexes, including the Dow, are set for their first quarterly decline in 2023.

All eyes will be on the final gross domestic product estimate and weekly jobless claims to gauge the strength of the U.S. economy and the labor market. Markets will also monitor remarks from Powell at 2 p.m. ET, with voting members Chicago Fed President Austan Goolsbee and Board Governor Lisa Cook also set to take the stage during the day. U.S. Pending Home Sales data will also be closely watched today.

PCE inflation, which is the Fed’s preferred inflation gauge, is also due Friday.

On the earnings front, notable companies like Nike, Accenture, Jabil Circuit, and CarMax are set to report their quarterly figures today.

WTI crude futures traded above $93 per barrel. Crude stocks at the key Cushing, Oklahoma storage hub dropped to the lowest level since July 2022.

Gold held below $1,880 an ounce on Thursday, hovering near its lowest levels in over six months, pressured by a strong dollar and rallying Treasury yields on the back of a higher-for-longer interest rate scenario.

The yield on the US 10-year Treasury note broke above 4.6%.