U.S. stock index futures advanced on Thursday, tracking a pullback in long-dated Treasury yields after a sharp rise earlier in the week. The move comes ahead of the release of the Federal Reserve's latest meeting minutes, which investors will scrutinize for signals on the timing and magnitude of future policy adjustments.
Futures tied to the S&P 500 rose 0.4%, while contracts on the Nasdaq-100 and Dow Jones Industrial Average each added about 0.3%, recovering from losses that pushed the major benchmarks to session lows by midday Wednesday. The declines followed a surge in the 30-year Treasury yield to its highest level since 2007, though the move reversed after the U.S. Treasury announced plans to increase repurchases of long-dated debt to at least $4 billion from $2 billion.
The 30-year yield, which had jumped 9.1 basis points earlier in the session, later trimmed gains to trade 4.9 basis points higher at 5.243%, while the benchmark 10-year yield fell 5.3 basis points. The retreat in yields helped ease pressure on equities after the S&P 500 closed down 0.7% at 7,653.99, the Nasdaq Composite slipped 1.1% to 26,051.66, and the Dow Jones Industrial Average fell 1.2% to 52,844.60.
Market expectations for a Federal Reserve rate hike in September have softened, with odds slipping to around 30% from over 50% a week ago, following a U.S. consumer inflation report that matched consensus estimates. Traders are now weighing the balance between persistent inflation pressures and signs of cooling economic momentum.
Oil prices extended weekly gains, with Brent crude futures up 2.5% to $93.88 a barrel, reflecting ongoing supply concerns amid geopolitical tensions in the Middle East. U.S. President Donald Trump warned of sweeping economic measures against countries enabling trade with Iran, though Iranian Foreign Minister Abbas Araghchi dismissed the threat as a distraction from domestic fiscal challenges.
Corporate earnings contributed to the day's volatility. Walmart shares tumbled 9.5% after reporting the smallest comparable sales growth in six years, missing analyst expectations. In contrast, Deere & Co. shares rose 5.8% after raising the lower end of its 2026 net income guidance and posting its first quarterly increase in net income in nearly three years.
The U.S. national debt surpassed $40 trillion this week, underscoring the fiscal backdrop against which the Federal Reserve is operating. Treasury Secretary Scott Bessent addressed market fundamentals and upcoming fiscal consolidation plans in remarks on CNBC, while strategists at Pathstone and AJ Bell noted the interplay between bond yields, equity valuations, and policy expectations.
