Dow Jones futures steady amid bond selloff, rising geopolitical tensions

Dow Jones futures inch higher by 0.05% to trade near 52,850 during European hours on Wednesday. Meanwhile, S&P 500 futures decline by 0.4%, to trade around 7,640, while Nasdaq 100 futures lose 0.19% to trade around 29,070.

US stock futures posted mixed results as traders adopted a cautious stance amid a global bond selloff. The benchmark 10-year US Treasury yield surged to 4.80%, reaching its highest level since early 2025.

Fed pricing edges higher as energy costs climb

Analysts at MUFG/BTMU highlight that markets are now assigning a modestly higher probability to further tightening, noting that “there are now 17bps of Fed hikes priced in for [the] 16th September FOMC meeting.” They argue that the recent rise in energy costs is a key driver of this shift, cautioning that “it will be harder for the Fed to leave rates on hold if energy prices continue to raise ahead of the meeting.”

Adding to market anxiety were higher oil prices, which amplified concerns over persistent inflation and potential Federal Reserve (Fed) interest rate hikes. Energy markets remained elevated following US military strikes against Iranian targets near the Strait of Hormuz, actions President Donald Trump described as direct retaliation for Tehran’s attempts to place sea mines in the vital waterway and an earlier attack on a US military base.

The mixed action in US equity futures follows a turbulent regular trading session on Tuesday, where the Dow Jones dropped 0.79%, the S&P 500 declined 0.71%, and the Nasdaq Composite fell 1.03%. The losses extended all three major benchmarks' losing streak to a third consecutive session, hit hardest by selloffs in consumer discretionary, industrial, and materials stocks.

Market participants are now shifting their attention to key economic indicators and corporate earnings, awaiting ADP private payrolls data, the Federal Reserve’s Beige Book, and quarterly results from prominent tech firms including Broadcom, Hewlett Packard, and Snowflake.