US stock futures and long-dated Treasuries declined as rising oil prices reignited inflation fears among investors. The S&P 500 futures fell 0.6%, while the 30-year Treasury yield rose seven basis points to 5.26%. Walmart Inc. tumbled 6% in premarket trading due to disappointing earnings, which raised concerns about the health of American consumers and dragged down other retail stocks. Despite the market downturn, Bitcoin traded above $70,000 for the first time since June, and gold dipped below $4,500 an ounce.
The decline in bonds came after a brief rally, as investors grew skeptical that the Treasury's plan to curb borrowing costs would be a long-term solution. Treasury Secretary Scott Bessent had previously indicated a larger potential for buybacks and an upcoming fiscal plan. However, the 30-year yields still climbed, and the S&P 500 continued its weekly decline, with Walmart ultimately sinking 9.7% on disappointing sales. Oil prices settled near $88 a barrel following President Donald Trump's threats against Iran, which clouded peace prospects.
Bessent dismissed the day's market movements as "noise" and stated that expanded buyback operations could exceed the planned $4 billion. He also mentioned an upcoming announcement on fiscal consolidation. This market action followed a series of Treasury decisions reflecting growing concern over rising long-term yields, which are impacting the broader economy. Analysts like Hardika Singh from Fundstrat Global Advisors expressed skepticism, stating that the "Bessent put" is unlikely to prevent yields from reaching multi-decade highs without addressing the underlying debt. Ulrike Hoffmann-Burchardi of UBS Chief Investment Office echoed this, believing the intervention does not fundamentally alter the long-term outlook for rates. San Francisco Fed President Mary Daly suggested the Treasury market indicates that monetary policy is currently well-positioned.
