US equity futures retreated from record highs as a rebound in bond yields revived worries that elevated borrowing costs could weigh on economic activity. Futures on the S&P 500 and Nasdaq slipped 0.5% and 0.8% from their respective peaks, while Dow futures declined 0.7%.
Geopolitical tensions also intensified market concerns. Iranian strikes on vessels in the Strait of Hormuz further drove up already-elevated shipping premiums for tankers in the region and heightened expectations for renewed energy inflation. Long-term borrowing costs remained underpinned by widening US federal budget deficits.
AI infrastructure stocks surrendered gains made earlier in the week, as rising yields and wider credit spreads increasingly weighed on order flows. Micron, AMD, Oracle, Lam Research, and Applied Materials each fell around 2%. This pullback came despite supportive sector news: SpaceX plans to issue $40 billion in debt to finance purchases of Nvidia chips. Nvidia shares were down 1%, and SpaceX declined 3%. In contrast, pharmaceuticals and consumer staples outperformed, trading higher on the day.
