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U.S. stock futures sank Thursday as investors confronted another surge in Treasury yields and elevated oil prices. Dow Jones Industrial Average futures dropped 347 points, or 0.7%, while S&P 500 futures fell 0.4% and Nasdaq 100 futures slid 0.6%.

The benchmark 10 year Treasury note yield climbed more than 5 basis points to 5.331%, near levels not seen since 2002. The 30 year Treasury bond yield traded near a 24 year high at 5.702% after gaining more than 4 basis points.

The 2 year Treasury note yield was nearly 3 basis points higher at 4.793%. One basis point equals 0.01%, and bond yields move in the opposite direction from prices.

The latest yield increase followed remarks from Federal Reserve Governor Christopher Waller, who said additional interest rate increases may be required to bring inflation back toward the central bank’s 2% goal. Waller said the increases would not need to occur at consecutive meetings.

Minutes from the Fed’s latest meeting also showed that most policymakers believed another rate increase would probably be appropriate before the end of the year. Officials offered no timetable and emphasized that future decisions would depend on incoming economic data.

Oil added another layer of pressure after President Donald Trump said he did not want to make a deal with Iran to end the war. Brent crude jumped 4% to around $104 per barrel, while West Texas Intermediate futures advanced 4% to roughly $92.

Reports that the U.S. was considering large scale military operations in Iran also kept markets on edge. NBC News reported that Trump and his national security team had discussed possibly restarting such operations in the coming weeks, including potential strikes before next month’s midterm elections.

Market segments sensitive to borrowing costs remained under pressure. Intel and Marvell Technology each fell more than 2%, while Bank of America and Citigroup declined around 1% as higher rates continued weighing on technology companies and banks.

Rising yields and oil prices have fueled volatility as concern grows that expensive energy could keep inflation elevated and push the Fed toward further rate increases. Still, many investors remained optimistic that corporate earnings could provide another catalyst for stocks.

The S&P 500 is expected to post blended earnings growth of roughly 30% in the third quarter, according to FactSet. That would mark a third consecutive quarter with earnings growth above 25%.

“If earnings remain strong, and the idea is that they probably will, if expectations are met and/or higher, that is going to sustain this rally — despite the fact that rates are higher,” Courtney Garcia, senior wealth advisor at Payne Capital Management, told CNBC’s “ Closing Bell .” “It’s not going to derail the market.”

Palantir Technologies bucked the broader decline, gaining 2% after Goldman Sachs upgraded the military software and analytics company from neutral to buy. Goldman raised its price target to $230, representing 18.5% upside from Wednesday’s closing price of $194.12.

The investment bank expects more government contracts, automated workers and a more vertical supply chain in Palantir’s future. Goldman analyst Gabriela Borges pointed to sovereign AI, bespoke applications and the company’s newer verticalization strategy as potential drivers of a larger total addressable market.

Labor market data remained firm. Initial unemployment claims totaled a seasonally adjusted 197,000 for the week ended Oct. 3, down 2,000 from the previous period and below the Dow Jones consensus estimate of 200,000, while continuing claims rose 17,000 to 1.72 million.

European and Asian markets also declined. The pan European Stoxx 600 was 0.85% lower in morning trading, while Japan’s Nikkei 225 closed down 1.42%, South Korea’s Kospi dropped 2.62%, Australia’s S&P/ASX 200 lost 0.77% and mainland China’s CSI 300 fell 1.09%.

Bank of France Governor Emmanuel Moulin said European inflation was “100%” driven by energy and that the geopolitical shock was feeding into a financial shock. He cited a strong correlation among oil, long term U.S. interest rates and European rates, but did not anticipate second round effects.

Other individual stocks posted sharp moves. HSBC’s Hong Kong listed shares dropped 3.9% following a Financial Times report about planned job cuts, while Wolfspeed surged more than 15% after securing a conditional $1.5 billion loan involving a financing commitment lasting 30 years from the War Department.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.