Stock futures slip as Treasury yields hit 24-year highs, oil climbs
U.S. stock futures fell early Thursday after Wall Street pulled back from records, with the 10-year Treasury yield near its highest since 2002. Brent crude rose above $103 a barrel on Gulf shipping attacks and Houthi strikes on Saudi Arabia. Rising yields and oil prices are reviving worries about inflation and interest rates.
U.S. stock futures pointed lower early Thursday. By 2:55 a.m. Eastern, Dow futures were down 0.5%, S&P 500 futures 0.3% and Nasdaq 100 futures 0.4%, Investing.com reported.
Wall Street slipped Wednesday after record closes on Tuesday. The S&P 500 fell 0.2%, the Dow lost 0.7% and the Nasdaq slipped 0.2%. The S&P 500 and Dow ended four-day winning streaks.
Bonds are the worry. The 10-year Treasury yield touched 5.36% on Wednesday, its highest since 2002, and the 30-year briefly reached 5.73%, Investing.com reported. Al Jazeera said yields have climbed to their highest in more than 20 years.
Oil adds to inflation fears. Brent crude jumped more than 3% in Asian trading to above $103 a barrel, Investing.com reported. Al Jazeera, citing Reuters, earlier had Brent at $101.53 and U.S. crude at $89.39. Traders are reacting to attacks on Gulf shipping, Houthi strikes on Saudi Arabia and an Axios report that the Pentagon told the military to prepare for possible renewed combat in Iran.
There is a cushion. The International Energy Agency said member countries stand ready to release more reserve oil if needed and would put diesel first. Last week, G7 nations agreed with the IEA to release 100 million barrels of diesel and crude.
The Federal Reserve is also in view. Minutes from its September meeting showed officials saw their latest rate hike as a way to contain inflation, not the start of a fast hiking run, Investing.com reported. Traders put roughly 18% odds on an October hike and about 80% on one by December, based on CME FedWatch.
Abroad, Samsung said third-quarter operating profit likely jumped nearly eightfold to a record on AI memory chip demand, though its shares fell in Seoul.
U.S. markets open at 9:30 a.m. Eastern.
What we know: Futures, yields and oil all pointed to a tense open.
What we don't: Whether oil's climb holds once U.S. trading begins.
Where outlets agree Investing.com and Al Jazeera both report Wall Street closed lower Wednesday after records as Treasury yields hit roughly 24-year highs and oil rose on Gulf supply fears.
Where they differ Al Jazeera, citing Reuters, had Brent near $101.50 early Thursday, while Investing.com's later check put it above $103.