Traders work on the floor of the New York Stock Exchange in New York on Sept. 16, 2026.

Stock futures fell Thursday as Treasury yields kept marching higher, with traders anticipating further rate hikes from the Federal Reserve.

Nasdaq-100 futures sank 1%. Dow Jones Industrial futures fell 215 points, or 0.4%. S&P 500 futures were down 0.6%.

The 30-year Treasury bond yield touched 5.44%, a level not seen since 2004. The benchmark 10-year Treasury note yield , which is tied to rates on mortgages, surged to 5.15%, near levels not reached since July 2007. The 2-year note yield was flat on the day, but scaled to a 2023 high earlier int he week.

Those moves came as oil prices rose sharply. International Brent crude futures rose 2.1% to $105.21 a barrel, while West Texas Intermediate crude gained 1.5% to $93.57.

As yields surged, so did the market's anticipation of further rate hikes from central bank policymakers. Fed funds futures trading suggests a greater than 75% likelihood that the policy-setting Federal Open Market Committee lifts its key rate once more in October, according to the CME FedWatch tool. That compares to a roughly 49% probability just a week ago.

Higher bond yields tend to squeeze consumers' finances as they face higher borrowing costs at a time when they're already paying more in fuel costs.

In a note Thursday morning, strategists at UBS Global Wealth Management said their base case was for energy disruption to remain relatively limited and an inflation shock insufficiently broad or persistent to derail economic growth.

"We continue to recommend positioning for further equity upside," they said. "But the latest market movements showed that volatility is likely to continue, as investors remain concerned over a range of risks, including geopolitical developments, inflation, government debt, and the sustainability of AI capex. In our view, building portfolio resilience is equally important while staying invested."

Readings from S&P Global's manufacturing and services purchasing managers' indexes suggested that U.S. businesses are continuing to boom. BMO Capital Markets said in a Wednesday note that even as the results were strong, "severe supply chain bottlenecks," as well as higher fuel and transport prices, can drive inflation.

"Overall, it was a much stronger-than-expected read on US business activity that implies ample latitude for both policy rates and Treasury yields to push higher in the near-term," said Vail Hartman, a U.S. rates strategist at BMO. "If anything, the data reinforces the risk of a renewed acceleration in demand-driven inflation even if supply-side inflation subsides."

In Asia-Pacific, Japan's Nikkei 225 closed 0.76% higher, while Australia's benchmark S&P/ASX 200 fell 0.72%. Mainland China's CSI 300 closed 1.73% lower. South Korea's markets were closed for a holiday.

European shares fell in morning trading, with the pan-European Stoxx 600 down 0.4%. Oil and gas stocks bucked the trend to trade sharply higher as energy prices rose.