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The 10-year Treasury yield breaks 5% for the first time since 2007, just as Trump and Xi sit down for talks. Here is what to watch tonight.
Wall Street closed lower on Wednesday. The Nasdaq fell 1.13% to 26,936, ending a four-day winning streak. The S&P 500 dropped 0.75% to 7,706, and the Dow lost 0.68%.
The pressure came from the bond market. According to CNBC, the 10-year Treasury yield jumped more than 13 basis points to 5.104%, its highest level since July 2007. Stronger-than-expected US business activity data, weak demand at the five-year note auction, and hawkish Fed commentary drove the move.
Tonight, the focus shifts to Washington. President Trump and President Xi Jinping hold formal talks, after US officials said the trade truce with China has been extended by two months to January 10.
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Tonight's Catalysts
Trump and Xi hold formal talks
The bilateral talks take place Thursday morning US time, which is tonight in Asia, followed by a state dinner. The US Trade Representative has flagged announcements on agriculture and non-tariff barriers. China-exposed names such as Nvidia (NVDA) and Broadcom (AVGO) may react to any signal.
Costco reports after the close
Costco (COST) releases its fiscal 2026 fourth-quarter results after the bell. Consensus expects EPS of about $6.53 on revenue of about $95 billion. The numbers offer a read on US consumer spending while rates stay high.
Higher yields make growth-stock valuations look more expensive. Fed Governor Michael Barr said further rate hikes are likely needed to tame inflation, as reported by The Hill. Initial jobless claims at 8:30 a.m. ET and new home sales at 10:00 a.m. ET could move yields again.
Pre-Market Pulse 📊
US index futures are trading in a tight range in early Asian hours. Beyond the watchlist, Darden Restaurants (DRI) reports before the open, and McDonald's (MCD) raised its dividend by nearly 4%. SoftBank also sold $11.1 billion in bonds to fund its OpenAI investment. Per-stock pre-market moves will be updated closer to the US open.
Macro Note 📝
Oil rose too. According to CNBC, Brent gained 3.86% to settle at $103.08 a barrel and WTI rose 1.81% to $92.16. Pricier oil adds to inflation pressure, keeping markets on edge about the Fed's next move.
Conclusion
Tonight, markets weigh two opposing forces: yields above 5% and the chance of good news from the Trump-Xi talks. A concrete deal could ease pressure on tech, while strong economic data could push yields even higher.
For those watching US stocks, use TLT as a guide to rates, watch how NVDA and AVGO react to headlines from Washington, and read Costco's results as a check on the US consumer. Plan ahead before the session starts.
Gotrade is the trading name of Gotrade Securities Inc., which is registered with and supervised by the Labuan Financial Services Authority (LFSA). This content is for educational purposes only and does not constitute financial advice. Always do your own research (DYOR) before investing.
M. Alfathan Rahman is a content writer with over 3 years of experience developing digital content strategies across various industries, including fintech. He has experience producing content for tax-related websites and financial education platforms registered with Kominfo (Indonesia's Ministry of Communication and Informatics). His focus areas include data research, and crafting financial articles that are informative, accurate, and accessible to investors of all experience levels.
