US pre-open: Futures fall as bond yields hit 16-month high

(Sharecast News) - Ongoing concerns about inflationary pressures driven by the Iran war were set to weigh on US stocks on Monday as bond yields rose to a 16-month high, prompting investors to continue taking profits following last week's record highs.

Dow futures were down 0.7%, while the S&P 500 and Nasdaq were falling 0.5% and 0.4%, respectively.

Both the S&P 500 and Nasdaq reached new all-time closing highs on Thursday, while the Dow neared its record set in February, before taking a sharp plunge on Friday as bond yields rose and a meeting between Donald Trump and Xi Jinping failed to result in any major tech deals between the US and China.

Bond yields continued to climb on Monday, with the yield on a 10-year US Treasury note rising to 4.609% from 4.596% previously, reaching levels not seen since January 2025, on speculation that the Federal Reserve may soon have to tighten policy to battle rising inflationary pressures.

Bond yields were also rising across Japan and Europe, with 10-year bond yields in Germany and the UK in particular hitting their highest since 2011 and 2008 respectively.

Meanwhile, Brent crude was up 1.3% at $110.65 a barrel before the opening bell, its highest level in two weeks, while WTI crude was also 1.3% higher at $106.80 a barrel, after Donald Trump said on Sunday that the "clock is ticking"

"It feels like Groundhog Day for global markets as US president Trump ramps up the speculation his next moves in the Middle East. Oil prices enjoyed a solid run higher last week and are poised for more gains even as reports of talks filter through to investors," said Chris Beauchamp, chief market analyst at IG.

Upcoming results from chip titan Nvidia on Wednesday gave investors another reason to sit on the sidelines, with expectations already sky high following a near-70% surge in the stock over the past 12 months, giving it a market capitalisation of $5.46trn as of Friday's close.

"The biggest company in the world's results this week provide a welcome distraction from the slow-motion crisis in the Middle East, if only temporarily. But with so much good news priced into tech stocks after the blistering rally of the last six weeks there is a significant risk that even Nvidia's bullish outlook will be enough to satisfy investors," Beauchamp said.