Stocks Rise Pre-Bell Following Treasury's Bond Market Intervention; Trump Announces 'Economic Warfare' Against Iran

US equity futures were trending higher on Thursday following the Treasury Department's move to intervene in the bond market, while investors assess President Donald Trump's announcement of tougher economic measures against Iran.

The S&P 500 rose 0.2%, the Dow Jones Industrial Average edged up 0.1% and the Nasdaq added 0.4% in premarket activity. The indexes ended Wednesday trading in the green following a three-day slump.

The Treasury Department said Wednesday it will at least double the size of its debt buybacks for longer-dated bonds. The move takes effect Sept. 9 and runs through Nov. 4, covering the rest of the current refunding quarter. Treasury said the increase is intended to provide greater liquidity support in the longer-dated bond market.

US government debt surpassed $40 trillion for the first time as of Aug. 18, multiple outlets reported Wednesday, citing Treasury Department data.

In a note emailed toon Wednesday, Jefferies Chief US Economist Thomas Simons described the Treasury's announcement as a "surprise" move. "It looks like this move will probably help to keep a lid on long-end yields for the near-term," Simons said.

Treasury yields were mixed before the open, with the two-year rate retreating 0.2 basis points to 4.18% while the 10-year rate gained 1.7 basis points to 4.67%. The 30-year rate advanced 2.4 basis points to 5.22%.

Trump said in a Wednesday post on Truth Social that the US will launch the "most crushing economic operation ever taken against any country" against Iran. Trump also threatened "tremendous economic consequences" to any nation whose financial institutions, businesses, airports or government entities attempt to assist Iran.

"This will be economic warfare and isolation on an unprecedented scale," Trump wrote. "This will be an economic D-day."

The United Arab Emirates recently suspended economic ties with Iran amid "regional escalations that undermine regional and international peace and security," UAE Foreign Ministry spokeswoman Afra Al Hameli said on X. The UAE is Iran's second-largest commercial partner, according to a CNN report.

West Texas Intermediate crude oil rose 2.6% to $88.03 a barrel in premarket action, while Brent gained 2.4% to $93.84.

Minutes from the Federal Reserve's July meeting showed Wednesday that officials acknowledged the need for an interest rate hike if inflation does not ease. At the meeting last month, Fed policymakers left interest rates unchanged in a divided decision, with three regional presidents calling for a hike of 25 basis points.

"There is a palpable hawkish sentiment brewing in the committee," BMO said in a Wednesday note. "But it will take inflation misbehaving to stir this sentiment further. Until then, the Fed will be holding indefinitely."

Markets are currently pricing in a 67% probability that the central bank will keep its benchmark rate steady in September, with the remaining odds in favor of a 25-basis-point hike, according to the CME FedWatch tool.

Thursday's economic calendar has the weekly jobless claims bulletin at 8:30 am ET, along with the Philadelphia Fed manufacturing index for August. St. Louis Fed President Alberto Musalem is scheduled to speak at 11:10 am.

Walmart (WMT) shares fell 6% after the retail giant issued third-quarter earnings guidance below analysts' expectations. Nordson (NDSN) climbed 9.8% after lifting its fiscal 2026 outlook, while Coty (COTY) fell 11% as its fiscal fourth-quarter adjusted loss came in wider than market estimates.

Chinese e-commerce heavyweight Alibaba (BABA) is expected to report its latest financial results before the bell, along with Advance Auto Parts (AAP). Ross Stores (ROST) posts earnings after the markets close.

Shares of Moderna (MRNA) dropped 9.8% pre-bell following a 177% jump at the close of the previous trading session. The drugmaker and Merck (MRK) announced positive topline results from a late-stage trial of an experimental skin cancer treatment on Wednesday. Merck was down 0.7% early Thursday.

Gold ticked up 0.1% to $4,550 per troy ounce, while bitcoin inclined 5.2% to $71,861.

Japan's Trade Gap Widens as Import Surge Outpaces Exports

Japan's trade deficit widened in July as imports grew faster than exports, while the country continued to shift its energy sourcing amid heightened risks around the Strait of Hormuz.Japan recorded a trade deficit of 634.5 billion yen in July, up from 409.9 billion yen the previous month but narrower than the 680 billion yen market forecast, according to preliminary data from the Ministry of Finance released Thursday.Exports rose 23.2% year over year to 11.5 trillion yen, accelerating from a 19.3% increase in June and exceeding the 19.9% consensus forecast tracked by Investing.com.Imports climbed 27.8% to 12.1 trillion yen, picking up from a 25.4% increase in the previous month and beating the 26.5% forecast.The export gains were led by electrical machinery, partly due to a surge in semiconductor exports. Machinery exports rose 18.4%, while transport equipment increased 20.7%, helped by a 19.5% rise in motor vehicle exports.By destination, exports to Asia increased 24.5%, with shipments to China rising 25.8% and those to Taiwan jumping 43.5%.Exports to the U.S. increased by 22%, while imports from the U.S. surged by 58%, pushing Japan's North American import bill up 56.3%.Against that backdrop, Japan expected to source about 100% of its average monthly crude oil imports in July from areas that do not require transit through the Strait of Hormuz, Prime Minister Sanae Takaichi said earlier last month."Thanks to the efforts of all of those involved, it looks like we'll be able to fully source all of our crude oil from areas outside of the Strait of Hormuz, despite having relied on the strait for over 90% of our oil previously," she had said, as quoted by Bloomberg.Energy supply uncertainty remains as a 60-day negotiating period under a U.S.-Iran memorandum of understanding expired Monday without a lasting peace agreement.The talks had sought to address tensions over the Strait of Hormuz, Iran's nuclear program, and economic sanctions.

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Kingsoft Posts Higher Quarterly, First-Half Earnings on AI Push, Cloud Growth

Kingsoft Corp. (HKG: 3888) reported higher earnings for the second quarter and first half of the year, driven by the integration of artificial intelligence across its operations to meet rising market demand.For the three months ended June 30, profit attributable to owners rose 3% to nearly 548 million yuan from 532.4 million yuan a year earlier. Diluted earnings per share increased to 0.40 yuan from 0.38 yuan.Revenue climbed 9% year over year to 2.51 billion yuan from 2.31 billion yuan. The growth was led by the office software and services segment, which benefited from the ongoing integration of AI technology into its WPS Office applications.Kingsoft Cloud expanded its AI capacity in response to growing demand for computing services, notably from Xiaomi (HKG:1810) and the broader Kingsoft ecosystem.According to a Jefferies research note, AI advancements helped Kingsoft Cloud achieve its first-ever positive operating profit under GAAP terms, alongside rapid growth across both internal and external client bases.However, online games revenue fell 15% amid product lifecycle transitions and intensifying market competition.For the first half, attributable profit more than doubled, jumping 101% to 1.64 billion yuan from 816.3 million yuan a year ago. Diluted EPS increased to 1.19 yuan from 0.59 yuan.First-half revenue grew 6% to 4.93 billion yuan from 4.65 billion yuan in the prior-year period, supported by the deployment of enhanced AI capabilities across the company's systems.Meanwhile, Kingsoft's mainland-listed subsidiary, Beijing Kingsoft Office Software (SHA: 688111), also reported a sharp increase in first-half attributable profit, which surged to 2.52 billion yuan from 747.2 million yuan a year earlier. Diluted EPS climbed to 5.41 yuan from 1.61 yuan, while revenue rose 25% to 3.31 billion yuan from 2.66 billion yuan.

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Australia's Unemployment Rate Counters Expectations With Rise to 4.5% in July

The number of employed Australians fell by nearly 16,000 in July, reversing gains seen in the previous month and countering expectations for continued jobs growth.The country's seasonally adjusted unemployment rate increased to 4.5% in July from 4.4% in the previous month as employment fell by 15,800 people, data from the Australian Bureau of Statistics showed on Thursday. The result follows an employment increase of 76,300 in June.Westpac expected the July jobless rate to hold steady at 4.4% and anticipated a lift in employment of 15,000, saying that a recent sharp jump in underemployment could be a "signal of more slack to come."The number of unemployed people rose by 4,200 from June to hit 691,500, while the underemployment rate remained at 6.4%, the data showed. The employment-to-population ratio and the participation rate both edged 0.2 percentage points lower to 63.9% and 66.9%, respectively."The majority of the fall in employment came from males, which fell by 11,000 people," said Sean Crick, head of labor statistics at the government agency. Female employment posted a smaller decline of 5,000.In July, Reserve Bank of Australia Assistant Governor Sarah Hunter said the country may need a period of higher unemployment to ease inflation expectations. The central bank left its key rate unchanged at 4.35% earlier this month, and is due to meet again in late September.A recent Commonwealth Bank of Australia report showed the country's annual wage growth rising to 3.2% in July from 3.1% in the previous month, while a Seek employment report indicated a continued decline in the volume of job ads in Australia in July but at a slower pace than earlier in the year.

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Japan's Trade Gap Widens as Import Surge Outpaces Exports

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Australia's Unemployment Rate Counters Expectations With Rise to 4.5% in July