U.S. equity futures extended losses on Thursday, September 10, 2026, following the release of producer price inflation data that came in higher than anticipated, amplifying concerns about persistent price pressures in the economy. As of 8:45 a.m. ET, futures markets reflected broad-based weakness.
Dow E-minis declined 171 points, or 0.33%, S&P 500 E-minis fell 43 points, or 0.56%, and Nasdaq 100 E-minis dropped 360.25 points, or 1.22%, according to Reuters reporting. The Labor Department reported that the Producer Price Index rose 5.4% in August on an annualized basis, slightly exceeding the 5.3% increase that economists polled by Reuters had anticipated. The data underscored inflationary pressures, with diesel costs playing a notable role in driving producer inflation higher.
Brian Jacobsen, chief economic strategist at Annex Wealth Management, noted that diesel inflation showed no signs of slowing and warned that rate hikes could increase the cost of financing expanded diesel production capacity. Energy markets experienced significant upward pressure amid the elevated inflation readings. Oil prices advanced 3% to surpass $100 per barrel for the first time since July, driven by ongoing disruptions to supply routes through both the Strait of Hormuz and the Red Sea stemming from a six-month-old conflict in the Middle East.
U.S. West Texas Intermediate crude climbed past $100 per barrel and was last trading up 4.61%. The inflation data increased market expectations for a potential Federal Reserve rate hike.
Traders now assess a 70% probability that the Federal Reserve will raise interest rates by at least 25 basis points next week, up from approximately 64% prior to Thursday's report, according to the CME FedWatch tool. Treasury yields climbed substantially in response. Two-year Treasury yields, which track interest rate expectations closely, jumped to 4.490%, their highest level since 2024.
The benchmark 10-year U.S. Treasury yield reached 4.901%, marking its highest level since 2023. Higher Treasury yields pressured equities by making risk-free government bonds more attractive relative to stocks.
The U.S. Treasury Department announced on Wednesday that it would purchase up to $6 billion in longer-dated Treasury bonds as part of an effort to control yield levels. However, ING strategists cautioned that such interventions may have only marginal and short-term impact, suggesting that sustained declines in long-end yields would require fundamental shifts in macroeconomic policy.
Kyle Rodda, senior financial market analyst at Capital.com, stated that while more aggressive Treasury buying efforts might have achieved better results, the persistence of rising yields highlighted the limited effectiveness of buyback operations. He underscored that meaningful long-term reductions in long-end yields require either reduced U.S. government spending or Federal Reserve rate increases. Among individual stocks, American Eagle Outfitters fell 14.5% in premarket trading after the company maintained its annual comparable sales forecast while indicating that gross margins in the current quarter could remain flat compared to the prior year.
Macy's was volatile and traded down 4% in premarket activity despite raising its annual earnings forecasts following stronger results at its Bloomingdale's and Bluemercury upmarket chains. Apple inched up 0.3% following its launch of Duo, a folding iPhone priced at $1,999. The market reaction reflected heightened sensitivity to economic data as investors reassessed growth and inflation risks.
The PPI report typically receives less attention than the Consumer Price Index, which was scheduled for publication on Friday. However, all economic indicators came under greater scrutiny after the Federal Reserve ceased issuing monetary policy guidance. Jacobsen suggested that if the Federal Reserve proceeds with a rate hike next week, it should be viewed primarily as a symbolic move to assert the central bank's independence and rebuild credibility rather than as an effective tool to address inflation pressures.
Source: Reuters, September 10, 2026
Source: reuters.com