Markets Weigh Growth Risks and Jobless Claims 08/10/2026
Market Wrap
U.S. stocks declined Wednesday, retreating from record highs as elevated Treasury yields continued to pressure equities ahead of the upcoming earnings season.
The S&P 500 slipped 0.2%, pulling back from the record reached a day earlier, while the Dow Jones Industrial Average dropped more than 340 points, or 0.7%. The Nasdaq Composite also fell 0.2%.
Treasury yields eased after a strong auction of $39 billion in 10-year notes attracted robust demand. Indirect bidders, including foreign central banks, accounted for more than 80% of purchases, well above the recent average of 72.4%. The auction helped pull the 10-year yield back from multidecade highs.
Higher borrowing costs have weighed on risk appetite in recent weeks, particularly in rate-sensitive sectors. Industrials have been the week's weakest performers so far, although investors remain hopeful that the upcoming earnings season could provide fresh momentum for equities.
Oil prices climbed Thursday as renewed geopolitical tensions in the Middle East heightened concerns over potential supply disruptions. Reports that Washington is considering broader military operations against Iran added to uncertainty in energy markets.
Attention now turns to Thursday's $22 billion auction of 30-year Treasury bonds, alongside weekly U.S. jobless claims and earnings from PepsiCo (PEP) before the opening bell.
With bond yields, geopolitical risks and corporate earnings all in focus, volatility could remain elevated as investors assess the next direction for equities.
Fed Signals Another Rate Hike This Year, but Timing Remains Uncertain
Federal Reserve officials expect to raise interest rates once more before the end of 2026 as persistent inflation and a resilient labor market keep pressure on policymakers, according to minutes from their September meeting released Wednesday.
Most officials judged that another increase would likely be appropriate this year, although the minutes offered no indication of whether the move would come in October or December.
The Fed unanimously raised its benchmark rate by a quarter percentage point in September, its first increase since 2023. Of the 18 officials who submitted economic projections, 16 anticipated another hike before year-end, with no additional increases projected for 2027.
Inflation remains the central concern. The Fed's preferred personal consumption expenditures gauge showed headline inflation at 3.4% in August and core inflation at 3%, both above the central bank's 2% target but below expectations.
Officials also pointed to a labor market close to maximum employment and stronger economic growth, reinforcing concerns that inflation could remain elevated without further tightening.
Still, recent inflation data and comments from Fed officials suggest policymakers may hold rates steady at their October 28 meeting, leaving December as a possible window for another increase.
Treasury yields have meanwhile climbed to their highest levels since 2002, reflecting expectations for tighter monetary policy, resilient economic activity and heavy investment in artificial-intelligence infrastructure.
For markets, the message is clear: the Fed remains inclined toward further tightening, but the timing will depend on incoming economic data. With bond yields already elevated, any shift in rate expectations could trigger renewed volatility across equities and fixed-income markets.
Stocks on the Move
- Levi Strauss (LEVI): Shares fell nearly 2% in extended trading after the denim retailer lowered its full-year revenue growth forecast, despite raising its profit outlook.
- Banks: Financial stocks declined as longer-dated Treasury yields climbed to 24-year highs. Citigroup (C), Wells Fargo (WFC) and Goldman Sachs (GS) fell nearly 2% each, while JPMorgan Chase (JPM), Bank of America (BAC) and Morgan Stanley (MS) lost around 1%.
- Webull (BULL): Shares plunged 20% after a congressional panel reportedly raised national security concerns over the trading platform's ties to the Chinese government.
- NetApp (NTAP): Shares gained 3% after Evercore ISI upgraded the data-storage company to outperform from in line, citing upside potential from its existing product portfolio.
- Worthington Steel (WS): Shares tumbled 10% after adjusted first-quarter earnings fell to 57 cents per share from 77 cents a year earlier, reflecting the impact of its majority-stake acquisition of Klöckner & Co.
Watchlist: PEP, NG, LEVI, APLD, TSLA, MSFT, MU, SPCX, RKLB, GOOGL, XOM, MSTR
Key Economic Events Today
Economic Data (EST)
- 08:30 AM — USD Unemployment Claims
- 10:00 AM — USD Final Wholesale Inventories
- 01:01 PM — USD 30-y Bond Auction
- 01:40 PM — USD FOMC Member Musalem Speaks
Earnings
Before Market Open: PepsiCo (PEP), Novagold Resources (NG), Helen of Troy Ltd. (HELE)
After Market Close: Park Aerospace (PKE)
