What could move markets Thursday after Wednesday's sell-off

U.S. stocks sold off on Wednesday as a sharp jump in Treasury yields intensified investor concerns that the Federal Reserve could raise interest rates further, setting a cautious tone heading into Thursday's session.

What drove Wednesday's decline

The major U.S. stock averages fell as bond yields climbed, a move that typically makes fixed-income assets more attractive relative to equities and raises borrowing costs across the economy. Investors have been closely watching Treasury yields as a signal of where the Federal Reserve's monetary policy may be headed.

Rising yields have repeatedly weighed on stock markets in recent sessions whenever traders interpret them as a sign that the central bank may need to keep monetary policy tighter for longer to contain inflation.

What traders will watch Thursday

Market participants are expected to keep a close eye on bond yields and any fresh economic data or commentary from Federal Reserve officials that could offer clues about the future path of interest rates. Wednesday's session underscored how sensitive equity markets remain to shifts in the rate outlook.

With no rate decision imminent, the focus for Thursday's trading session is likely to remain on whether Treasury yields stabilize or continue climbing, and how that shift affects investor appetite for stocks.