NEW YORK — U.S. stock markets are beginning September under renewed pressure as rising Treasury yields and higher oil prices raise concerns about inflation and the path of Federal Reserve policy.
Stock-index futures moved lower Tuesday, with Dow, S&P 500 and Nasdaq 100 futures all declining before the opening bell. The 10-year Treasury yield has also climbed to levels that are making investors more cautious about high-growth equities.
September Begins With a More Cautious Market
The move comes after a strong August for U.S. equities.
Investors are now entering September with several competing forces affecting market sentiment.
Higher Treasury yields can make bonds more attractive compared with stocks while also increasing borrowing costs for companies.
Technology and growth stocks can be particularly sensitive to rising yields because investors place greater value on future earnings.
Oil prices are adding another concern.
Higher energy costs can feed into inflation and increase expenses for consumers and businesses.
That could complicate the Federal Reserve's decisions about interest rates.
Investors are also watching economic data scheduled for release this week, including labor-market indicators and Friday's employment report.
Those numbers could provide additional clues about the strength of the U.S. economy.
The market is also dealing with geopolitical uncertainty involving the Middle East.
Higher oil prices connected to geopolitical tensions could increase inflationary pressure if they remain elevated.
Despite the cautious start, analysts continue to point to relatively strong corporate earnings and economic fundamentals as reasons not to assume that the market's longer-term trend has changed.
For American investors, September is beginning with a familiar question: whether inflation, interest rates and geopolitical risks will outweigh the strength of corporate profits.
