Nasdaq Futures Pare Gains as Treasury Yields Climb

September Nasdaq 100 E-Mini futures (NQU26) are up +0.16% this morning, paring earlier gains as a surge in Treasury yields tempered investor appetite for risky assets.

Treasuries fell across the curve on Friday, giving back some of yesterday's sharp gains as oil prices swung into positive territory. The 10-year T-note yield rose 4.4 basis points to 4.98%.

The price of WTI crude reversed an earlier drop of as much as -2% and edged higher, with investors focused on the next round of diplomacy over the U.S.-Iran war. U.S. President Donald Trump is reportedly set to meet with Gulf leaders next week on the sidelines of the UN General Assembly in New York.

Market participants are now awaiting the Federal Reserve's industrial production report and comments from Fed officials.

In yesterday's trading session, Wall Street's major indices closed sharply higher as Treasury yields tumbled on lower oil prices and growing confidence in the Fed's ability to rein in inflation. Chip and AI infrastructure stocks climbed, with Arm Holdings (ARM) surging over +8% and Intel (INTC) rising more than +7%. Also, the Magnificent Seven stocks advanced, with Nvidia (NVDA) and Tesla (TSLA) gaining over +2%. In addition, Generac Holdings (GNRC) jumped more than +18% and was the top percentage gainer in the S&P 500 after the company announced a long-term agreement to supply Amazon with generators for its data centers. On the bearish side, Fluence Energy (FLNC) tumbled over -15% after the company cut its full-year revenue guidance.

Economic data released on Thursday were mixed. The number of Americans filing initial jobless claims in the past week unexpectedly fell by -10K to an 8-week low of 196K, compared with expectations of 207K. Also, the U.S. Philly Fed manufacturing index fell to 37.8 in September, but came in above expectations of 31.3. In addition, U.S. August pending home sales unexpectedly rose +0.3% m/m, stronger than expectations of -0.2% m/m. At the same time, U.S. August housing starts unexpectedly fell -2.6% m/m to 1.275 million, weaker than expectations of 1.320 million, and building permits, a proxy for future construction, fell -2.7% m/m to 1.394 million, weaker than expectations of 1.400 million.