US pre-open: Stocks under pressure as bond yields close in on 5%

US stock markets were on track for their third straight day in the red as rising geopolitical tensions and elevated bond yields weighed on risk appetite, while investors digested a raft of mixed corporate earnings.

Futures were pointing to falls of around 0.2% to 0.3% across the Dow, S&P 500 and Nasdaq in pre-market trade.

With little US economic data scheduled to be released during the session, the focus will be firmly on newsflow from Israel, where the government and Hamas continue to blame each other for a devastating airstrike on a Gazan hospital on Tuesday evening, which left scores dead.

Tensions were rising across the wider region, with Iran calling for an oil embargo on Israel in response to the continued bombing of Gaza. Meanwhile, the US government has backed Israeli claims that it did not carry out the attack, following a face-to-face meeting between Joe Biden and prime minister Benjamin Netanyahu on Wednesday.

"Whilst some haven assets benefited from the geopolitical risk premium, sovereign bonds continued to sell off sharply across the world. US Treasuries were at the forefront of that, with yields rising to new cycle highs across the curve," said analysts at Deutsche Bank.

On Wednesday, the yield on a 10-year US Treasury jumped 8.1 basis points to close at a high of 4.91% – a new high since the global financial crash. This morning, it's up a further 6.2bp to 4.964%, nearing levels not seen since July 2007. Yields are continuing to rise on the back of a bunch of stronger-than-expected US economic data in recent weeks.

Comments from Federal Reserve chair Jay Powell will be closely watched at 1200 ET when he speaks at the Economic Club of New York, as investors look for clues on future monetary policy.

Meanwhile, WTI crude was down 1.4% at $87.10 a barrel, pulling back after a strong rise over recent days, on the back of supply concerns surrounding Israel.

Deutsche Bank analysts pointed out that Israel only plays a small role in the global oil market, but recent comments from Iran "served as a reminder of the 1973 oil embargo (50 years ago this week) that sent several Western countries into recession and led to a sharp rise in inflation".

Netflix shares surged after-hours after the streaming group impressed with an 11% rise in subscriptions in its third quarter, along with plans to raise prices.

Meanwhile, Tesla was set to reverse after a worse-than-expected decline in third-quarter profits, as founder Elon Musk delivered a cautious outlook on the obstacles standing in the way of its long-delayed Cybertruck.

AT&T, Freeport-McMoRan, Western Alliance Bancorp, CSX, and Blackstone will all report earnings today.