U.S. equities are poised for a subdued start on Tuesday, with major indexes likely to open little changed but under pressure as long-dated Treasury yields climb to multi-year highs and oil prices extend gains amid ongoing geopolitical tensions in the Middle East.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite are all projected to trade near flat levels at the open, following Monday’s mixed session. Technology stocks, which led last week’s rebound, are expected to lag early as rising borrowing costs and elevated energy prices weigh on risk appetite.
Benchmark 10-year U.S. Treasury yields have surged to their highest levels since 2007, reflecting heightened expectations for prolonged restrictive monetary policy from the Federal Reserve. The move has dampened demand for growth-oriented equities, particularly in the tech sector, where valuations are sensitive to rising discount rates.
Crude oil prices have also climbed, with Brent crude nearing $90 per barrel, as concerns over potential supply disruptions in the Persian Gulf persist. The sustained upward pressure on energy costs adds to inflationary pressures, further complicating the outlook for risk assets.
Analysts note that while the broader market may avoid sharp declines, the combination of elevated yields and geopolitical risks is likely to keep investor sentiment cautious in the near term.
