Key Takeaways
- Bond Yields Jump to 24-Year Highs, Futures Fall
- Investors Take Profits After New Closing Highs Tuesday
- FOMC Minutes Will Hopefully Give Insights on Monetary Policy
Wednesday, October 7th, 2026
Pre-market futures are giving back some of the gains they’ve made so far this week, partly due to profit-taking and partly due to decades-high bond yields on the long end. The Dow is down -423 points, the Nasdaq is -241, the S&P 500 is -35 and the small-cap Russell 2000 is off by -23 points. The Nasdaq and S&P 500 are just off new all-time closing highs.
The bond market is putting its foot down, taking upon itself to price-in challenges regarding high oil prices for much longer than expected, inflation remaining high overall and a national debt threatening to get worse from its current -$40 trillion. Both the 10-year and 30-year yields are at highs not seen since 2002 — back in the days of the Enron and WorldCom scandals.
The 10-year is presently +5.345% and the 30-year is +5.723% (which is not helping bring down the home mortgage market). The 2-year yield is a relatively tame +4.818%, but that’s still 150 basis points (bps) higher than where we were just eight months ago, and the highest level we’ve seen in more than two years.
Oil prices are up slightly but remain somewhat subdued: $90 per barrel (/bbl) on WTI and $101/bbl on Brent crude. While President Trump hammers the familiar note that the “war could end soon,” the general consensus at this stage is that we won’t see any meaningful change on global oil supply based on a peace agreement with Iran until sometime after the midterm elections — now fewer than four weeks away.
FOMC Minutes Due This Afternoon
At the last Federal Open Market Committee (FOMC) meeting mid-last month, the Fed raised interest rates for the first time since July 2023, by 25 bps to a range of +3.75-4.00%. It’s the first Fed move of any kind since the 25-bps cut back in December of last year. Odds are that there will be no hike at the next FOMC meeting three weeks from now.
However, odds are low that the Fed is “one and done” with rate moves — these usually happen in series of moves. For instance, the final three FOMC meetings of both 2024 and 2025 had three straight rate cuts. Prior to that, the Fed hiked in 10 straight meetings to calm inflation which came about due to post-Covid demand, Russia’s invasion of Ukraine, and the Fed’s delay in making a move on curbing interest rates.
Because we get precious little information these days from Kevin Warsh-led Fed — either in the monetary statement or the press conference that follows — analysts are increasingly looking toward these minutes releases for information that might indicate which way the Fed is leaning for future meetings. At this stage, the likelihood remains that 25 bps hikes will continue at the December meeting and into 2027.
Questions or comments about this article and/or author? Click here>>
View the Zacks #1 Rank List
Image: Bigstock
Pre-Markets Down on Higher Bond Yields, Ahead of Fed Minutes
Key Takeaways
Wednesday, October 7th, 2026
Pre-market futures are giving back some of the gains they’ve made so far this week, partly due to profit-taking and partly due to decades-high bond yields on the long end. The Dow is down -423 points, the Nasdaq is -241, the S&P 500 is -35 and the small-cap Russell 2000 is off by -23 points. The Nasdaq and S&P 500 are just off new all-time closing highs.
The bond market is putting its foot down, taking upon itself to price-in challenges regarding high oil prices for much longer than expected, inflation remaining high overall and a national debt threatening to get worse from its current -$40 trillion. Both the 10-year and 30-year yields are at highs not seen since 2002 — back in the days of the Enron and WorldCom scandals.
The 10-year is presently +5.345% and the 30-year is +5.723% (which is not helping bring down the home mortgage market). The 2-year yield is a relatively tame +4.818%, but that’s still 150 basis points (bps) higher than where we were just eight months ago, and the highest level we’ve seen in more than two years.
Oil prices are up slightly but remain somewhat subdued: $90 per barrel (/bbl) on WTI and $101/bbl on Brent crude. While President Trump hammers the familiar note that the “war could end soon,” the general consensus at this stage is that we won’t see any meaningful change on global oil supply based on a peace agreement with Iran until sometime after the midterm elections — now fewer than four weeks away.
FOMC Minutes Due This Afternoon
At the last Federal Open Market Committee (FOMC) meeting mid-last month, the Fed raised interest rates for the first time since July 2023, by 25 bps to a range of +3.75-4.00%. It’s the first Fed move of any kind since the 25-bps cut back in December of last year. Odds are that there will be no hike at the next FOMC meeting three weeks from now.
However, odds are low that the Fed is “one and done” with rate moves — these usually happen in series of moves. For instance, the final three FOMC meetings of both 2024 and 2025 had three straight rate cuts. Prior to that, the Fed hiked in 10 straight meetings to calm inflation which came about due to post-Covid demand, Russia’s invasion of Ukraine, and the Fed’s delay in making a move on curbing interest rates.
Because we get precious little information these days from Kevin Warsh-led Fed — either in the monetary statement or the press conference that follows — analysts are increasingly looking toward these minutes releases for information that might indicate which way the Fed is leaning for future meetings. At this stage, the likelihood remains that 25 bps hikes will continue at the December meeting and into 2027.
Questions or comments about this article and/or author? Click here>>