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Shift in Rate Expectations Hits Stock Futures, Bonds

Stocks were poised for losses, government bond prices fell, and the dollar strengthened as investors amped up bets on how far the Federal Reserve will raise interest rates in the coming months.

U.S. stock futures fell. S&P 500 futures lost 0.6%. Contracts tied to the Dow industrials and Nasdaq-100 fell 0.4% and 0.8% respectively.

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Treasury prices fell. That pushed the yield on 10-year notes up to 3.884% from 3.842% Thursday.

The dollar strengthened and gained 0.5%.

Commodities skidded. Most active Brent crude contracts fell 3.1% to $82.49 a barrel. Copper, natural gas and gold also fell.

Overseas markets retreated. The Stoxx Europe 600, the Shanghai Composite and Japan’s Nikkei 225 all lost less than 1%.

Stocks have reversed some of their gains from a blockbuster start to the year, as strong macro and inflation data have undercut the idea that Fed is nearly done raising rates.

Two Fed officials said Thursday they would have supported raising rates by half a percentage point at the central bank’s meeting earlier this month.