U.S. stock futures fell in early trading Thursday while Treasury yields remained high amid the Federal Reserve’s cautious interest rate policy as investors paused on the early Santa Claus rally.

Stocks have posted significant holiday gains so far this year, with the S&P 500 rising 1.1% during the shortened Christmas Eve session, driving outsized gains for megacap tech stocks and pushing Apple to a $4 trillion valuation headed towards (AAPL) offset another rise in Treasury yields that could dominate markets next year.

The benchmark 10-year notes were valued at 4.613% in overnight trading, a value that represents a gain of about 42 basis points from the month of December and about 3.5 times the S&P 500 dividend yield of 1.32% .

Short-term yields have also risen, with 2-year bonds now at 4.347%, up about 20 basis points from late November levels, as traders price in fewer Fed rate cuts in 2025 and improve their growth and inflation forecasts to recalibrate the world’s largest economy.

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Wall Street, meanwhile, is trying to pare some of its gains from earlier in the week into today’s session, although trading volumes are traditionally light due to this year’s Christmas holiday and the eight-day Hanukkah commemoration that began Wednesday.

Futures contracts pegged to the S&P 500 indicate a 32-point opening bell decline, while futures contracts pegged to the Dow Jones Industrial Average indicate a 238-point decline.

The technology-focused Nasdaq is trading 133 points lower with Tesla (TSLA) Nvidia (NVDA) and Palantir (PLTR) active in early pre-market trading.

Other Wall Street Analysts:

In Europe, several key markets remained closed for the region’s post-Christmas holidays, including Boxing Day in the UK, limiting action for the blue-chip benchmarks.

The Stoxx 600 index rose 0.32% in Frankfurt.

In Asia, Japan’s Nikkei 225 rose 1.12% overnight in Tokyo after Bank of Japan Governor Kazuo Ueda made dovish comments on interest rate hikes yesterday. Meanwhile, the regional MSCI ex-Japan benchmark fell slightly by 0.08% by the close of trading.

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