Dow Futures Edge Lower As Elevated Treasury Yields Weigh On Investor Sentiment

U.S. stocks appear set for a weak opening on Friday as elevated Treasury yields dampened investor sentiment. Yields rose on Thursday after President Donald Trump’s highly anticipated tax bill cleared the House, sparking concerns about the fiscal deficit.

While Dow Jones futures were down by 0.11% at the time of writing, the S&P 500 futures fell 0.07%, and the tech-heavy Nasdaq 100’s futures were down by 0.06%. Futures of the Russell 2000 index edged up by 0.07%.

Meanwhile, the SPDR S&P 500 ETF Trust (SPY) was down by 0.06%, while Invesco QQQ Trust (QQQ) declined 0.05% on Friday morning.

Trump’s tax bill passing the House vote sent the 30-year Treasury yield soaring to 5.161% on Thursday, the highest level since October 2023. At the time of writing, the yield stood at 5.036%.

The benchmark 10-year yield stood at 4.529%, while the 2-year yield stood at 3.983% – both down by two basis points.

Bitcoin (BTC) rose 0.29% in the past 24 hours, scaling another all-time high while staying above the $111,000 level.

Asian markets ended Friday’s trading session on a mixed note. The Nikkei 225 index rose the most, at 0.47%, followed by the Hang Seng, which gained 0.24%.

The Shanghai Composite index fell the most at 0.95%, followed by the TWSE Capitalization Weighted Stock index at 0.09%, and KOSPI at 0.06% decline for the day.

AI bellwether Nvidia's (NVDA) earnings will also be on investors' minds. The company is scheduled to declare its first-quarter fiscal 2026 earnings on May 28.

The Path To Rate Cuts In 2025

Federal Reserve Governor Christopher Waller pointed out that the path to rate cuts in 2025 is still visible. However, he explained that a lot hinges on how President Donald Trump shapes his tariff war.

"If we can get the tariffs down close to the 10% and then that's all sealed, done and delivered somewhere by July, then we're in good shape for the second half of the year,” Waller said.

This comes at a time when Federal Reserve Chair Jerome Powell has adopted a “wait-and-watch” approach, stating that President Trump’s tariffs have been larger than expected.

The Fed’s key rate is currently in the 4.25% to 4.50% range.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Also See: Morgan Stanley Maintains S&P 500 Target For 2025 Despite Trump Tariff Shock

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