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U.S. stock futures climbed Wednesday as oil prices eased and a dovish signal from a key Fed policymaker cooled bets on an October rate hike — a sharp reversal from the week’s earlier panic over surging bond yields.
What happened
New York Fed President John Williams indicated the central bank doesn’t need to rush into raising rates again after September’s hike. Two-year Treasury yields fell, and markets sharply repriced: the odds of the Fed holding in October rose to 57% (per LSEG), while CME FedWatch put an October hike at just 42.6% — down from roughly 70% earlier in the week.
The trigger was a bond-market blowout on Tuesday: the 30-year Treasury yield hit its highest level since 2002, around 5.55%, and the 10-year topped 5.2% before pulling back on Wednesday. Lower oil prices — the most-traded December Brent contract fell 0.8% to $95.34 on recovering Middle East exports — eased pressure on yields.
- Dow futures +0.5%, S&P 500 futures +0.3%, Nasdaq futures +0.2%
- August PCE inflation data (the Fed’s preferred gauge) lands today; September payrolls hit Friday (consensus ~90,000–98,000 jobs, 4.1% unemployment)
- Gold recovered back above $4,200; Japan’s Nikkei gained 3%; Bitcoin held near $83,400
Why it matters
This is the first real crack in the hawkish repricing that has hammered markets since the Fed’s September hike. With Williams — an influential voice on the board — openly signaling patience, the bond market got permission to breathe, and rate-sensitive stocks followed. But it’s fragile: a hot PCE print today or strong payrolls Friday would revalidate the hawkish path and push the 10-year into uncharted territory for this cycle.
For everyday investors, the swing in October hike odds from 70% to ~43% in days shows how violently the market is repricing the Fed — and why bond volatility, not stocks, is currently the driver.
What to watch
Today’s August PCE index and Micron earnings after the close; Friday’s September nonfarm payrolls; commentary from the rest of the Fed board this week, which will test whether Williams’s patience is the committee’s view or an outlier.
Related reading: Mortgage Rates Top 7% After Fed Hike and Bond Selloff · UBS Warns Markets Overprice October Fed Hike
Sources: Wall Street Journal
If the Fed skips October, do you see it as a one-month pause or the start of the hiking cycle fizzling out?
Auto-posted by the Bull Lounge news desk.
Not financial advice.Log in to vote
