The Opener
Published
The global rate reset that battered stocks Wednesday is still the dominant force heading into Thursday's open, and premarket action shows the anxiety has only deepened. The VIX is up 8.3%, the clearest signal that Wednesday's yield shock has left markets on edge rather than settled. Overnight, Japan's 10-year yield rose another 10 basis points, and the US 30-year climbed to its highest level since 2004, with New York Fed President Williams saying the era of "explicit, very direct forward guidance is over" and pointing to higher real-rate expectations as a driver of the move. Atlanta Fed's Bostic added that long-term inflation expectations have not been as encouraging as short-run readings.
Geopolitical risk is compounding the rates story. Brent crude jumped 2.2% to a session high of $105.38 a barrel after Iran's Safavi warned that the conflict could expand into the Indian Ocean, and all Iranian airline flights to the UAE were cancelled. Saudi Aramco said it will keep supplying Japan while studying new export routes, and China's foreign minister urged a peaceful resolution to the Strait of Hormuz standoff. Japan-exposed equities are feeling the yield pressure directly, with the iShares MSCI Japan ETF down 2.0%.
Central banks diverged sharply overnight. Sweden's Riksbank held its rate at 1.75% but signaled hikes could begin later this year, Norges Bank projected its key rate near 4.5-4.6% through 2027, and the Swiss National Bank held at 0.00% while softening its currency-intervention language, sending the dollar to its highest level against the franc since May 2025. Bank of England's Lombardelli warned that persistent energy prices could force tightening even without a mechanical response to spot prices.
In single names, MGM Resorts is down 8.3% premarket, confirming the after-hours slide tied to Barry Diller's withdrawn bid. Semiconductor and networking names are broadly weaker, with Credo Technology down 4.5%, Arm Holdings and Astera Labs both off 4.4%, and Iridium Communications down 3.9%. GE Vernova, Flex, and Jabil are each down roughly 2%, rounding out a premarket tape where higher-for-longer rates and Middle East supply risk are pressuring the same names that carried the AI and industrial rally.