Wall Street Starts Thursday Under Pressure

U.S. stock futures were lower early Thursday as investors weighed the impact of elevated Treasury yields, stronger-than-expected economic activity and renewed expectations for Federal Reserve tightening. Nasdaq futures were down 0.6%, while S&P 500 futures declined 0.4% as of 4:00 a.m. ET. Dow and Russell 2000 futures were each lower by 0.2%.

The move comes after stronger U.S. PMI data pushed Treasury yields sharply higher. The combination has placed interest-rate expectations back at the center of the equity-market outlook, particularly for technology stocks whose valuations can be more sensitive to changes in borrowing costs.

Treasury Yields Put Monetary Policy Back in Focus

The 10-year Treasury yield climbed above 5.1%, reaching a level near a two-decade high after unexpectedly strong U.S. business activity data. Markets subsequently priced in nearly a 70% probability of another Federal Reserve rate increase in October.

Fed Governor Michael Barr has also warned that risks surrounding the achievement of the central bank’s inflation target have increased. Several Federal Reserve officials are scheduled to speak Thursday, giving investors additional opportunities to assess whether the latest economic strength is changing the policy outlook.

Trump-Xi Meeting Becomes a Major Market Catalyst

Attention is also shifting toward Washington, where President Donald Trump is scheduled to meet Chinese President Xi Jinping. The meeting comes after the United States and China agreed to extend their trade truce through January 10, 2027, giving negotiators additional time to work toward a broader agreement.

The discussions carry implications beyond tariffs. Trade, artificial intelligence and strategic supply chains remain important areas of U.S.-China economic competition, making the meeting particularly relevant for technology and industrial companies with exposure to global manufacturing networks.

AI and Technology Stocks Remain in Focus

Several technology names were moving in premarket trading as investors assessed developments across artificial intelligence and consumer hardware. Meta shares fell more than 1% after the company unveiled new virtual-reality glasses, an AI device and expanded retail integrations for its AI agent. Unity Software gained about 5% as Meta’s hardware expansion raised expectations for greater developer activity.

Alphabet was also attracting attention following confirmation from DeepMind leadership that its next-generation Gemini 4 model had entered early post-training, while Snap shares declined nearly 2% amid competitive concerns surrounding Meta’s smart-glasses strategy.

Biotech, Space and Defense Stocks Add to the Radar

Retail investors were also tracking a range of higher-volatility names. SpaceX remained in focus amid discussion surrounding a potential IPO lockup release and a U.S. Space Force agreement. Viking Therapeutics declined in premarket trading following a $200 million stock offering and $200 million debt raise, while Sellas Life Sciences awaited clinical-trial updates.

Grail attracted attention following an FDA advisory-panel vote supporting approval of its Galleri multi-cancer early-detection blood test. Ondas Holdings also remained in focus after announcing the acquisition of three defense technology businesses for $56 million.

McDonald’s and Earnings Also Draw Attention

McDonald’s shares showed a modest premarket rebound after the company’s CFO warned that a weak start to the third quarter could keep U.S. same-store sales slightly negative. The company has simultaneously introduced new 2030 targets and an $8.5 billion franchisee investment program focused on artificial intelligence and operational improvements.

Investors will also monitor BlackBerry, Kandi Technologies, Wimi Hologram Cloud, Uxin and Darden Restaurants before the opening bell, while Costco is scheduled to report after the market closes.

What Investors May Watch Next

Thursday’s market direction will depend on the interaction between interest-rate expectations and geopolitical developments. Investors will monitor weekly jobless claims and new-home sales for further evidence about the U.S. economy, while speeches from Federal Reserve officials could influence rate expectations. The Trump-Xi meeting adds another potential catalyst, particularly for technology and companies exposed to global supply chains. With Treasury yields already elevated, stronger economic data or a more hawkish Fed tone could keep pressure on equities, while progress in U.S.-China negotiations could influence risk appetite.