US stock futures skid as traders brace for interest-rate hikes

US stock futures opened September in the red, weighed down by surging bond yields, climbing oil prices, and growing expectations that the Federal Reserve will raise interest rates again. The Nasdaq-100 dropped roughly 1% in early trading, while S&P 500 and Dow Jones Industrial Average futures each slipped about 0.5%.

Yields, oil, and a hawkish Fed

The US 10-year Treasury yield climbed to approximately 4.79%, its highest level since January 2025. Japan’s 10-year government bond yield hit 3%, a mark not seen since 1996, and European benchmark yields touched multi-year highs as well.

The catalyst for much of the yield spike traces back to Federal Reserve Chair Kevin Warsh’s recent speech at Jackson Hole, which leaned unmistakably hawkish. Markets responded by pricing in a 65% to 67.5% probability of a 25-basis-point rate hike at the September FOMC meeting. The July PCE reading, the Fed’s preferred inflation gauge, came in at 3.7% year-over-year.

Brent crude pushed above $91 to $92 per barrel, driven by heightened military tensions between the US and Iran. Supply concerns centered on the Strait of Hormuz, a chokepoint through which roughly a fifth of the world’s oil flows.

Energy stocks were the lone bright spot in futures trading, benefiting from the same supply fears that were punishing everything else. Technology stocks bore the brunt of the damage, as high-growth tech names are especially sensitive to rising interest rates because their valuations depend heavily on future earnings.

Key data on deck

The JOLTS jobs report landed on September 1, with nonfarm payrolls following later in the week. Both reports will feed directly into the Fed’s decision-making ahead of its mid-September meeting. The data window between now and the FOMC decision is narrow, making whatever these reports show the last major labor market signals policymakers digest before voting on rates.

Global pressure points

Japan’s yield surge to 3% is particularly notable, as the Bank of Japan spent decades keeping rates pinned near zero. The fact that Japanese government bonds are now offering returns not seen since 1996 reflects a fundamental shift in how markets view inflation and monetary policy worldwide.

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