Nasdaq futures declined on Wednesday in anticipation of earnings reports from multiple major technology firms, coinciding with a rise in oil prices and a peak in 10-year Treasury yields, reaching their highest point in two months. Futures for the Nasdaq 100, S&P 500, and Dow Jones Industrial Average indicated declines of 1%, 0.4%, and 0.2%, respectively, in the latest trading session. The tech-focused Nasdaq Composite, benchmark S&P 500, and blue-chip Dow experienced an uptick yesterday, reversing a trend of three consecutive sessions of losses, driven by robust performance in chip stocks. Investors’ focus today will shift towards the earnings reports of major technology firms, as members of the Magnificent Seven, Alphabet and Tesla, are scheduled to disclose their results following the market’s close.
Shares of Google parent Alphabet experienced a modest increase of less than 1% in premarket trading, whereas Tesla’s shares declined slightly following the electric vehicle manufacturer’s notable performance, leading the group with a 2.5% rise yesterday. GE Vernova shares dropped 6%, while AT&T shares rose 4.5% following their results reported before the bell on Wednesday. IBM, Texas Instruments, and ServiceNow are slated to do so after markets close. Oil prices surged as tensions between the U.S. and Iran escalated, with U.S. Secretary of State Marco Rubio asserting that the Middle Eastern nation was “not serious about talks.” West Texas Intermediate futures, the U.S. benchmark, experienced a notable increase of 3.5%, reaching $87.30 a barrel, marking their highest level in six weeks. Brent crude futures, the global benchmark, experienced an increase of 3.8%, reaching $94.50 per barrel.
Meanwhile, the 10-year Treasury yield, which influences interest rates on a variety of consumer loans including mortgages, reached its highest intraday level since May 21 early Wednesday at approximately 4.65%, an increase of nearly two basis points from Tuesday’s close. According to the CME Group’s FedWatch tool, traders are assigning a 24% probability to a Federal Reserve rate hike at its upcoming meeting, an increase from under 11% just a week prior. Additionally, there is a 69% chance of at least a quarter-percentage-point rate hike at the September meeting, rising from 48% a week ago. Bitcoin was trading around 65,800, down from overnight highs around 66,700. The U.S. dollar index, which monitors the value of the greenback relative to a selection of foreign currencies, registered a decline of 0.1% at 101.10. Gold futures increased by 1.1%, reaching $4,120 per ounce.
The Roundhill Memory ETF declined more than 3% before the bell after soaring 11% yesterday, as shares of Micron, SK Hynix, Sandisk, Western Digital, and Seagate Technology pulled back 2% to 6%. The iShares Semiconductor ETF declined 2% following a 5.5% increase on Tuesday, with Advanced Micro Devices, Intel, and Marvell Technology experiencing declines ranging from 1.5% to 3%. Shares of Super Micro Computer soared 15% after the maker of AI servers estimated current-quarter gross margins would be roughly double their previous projection. Shares of rival server manufacturers Hewlett Packard Enterprise and Dell Technologies experienced an increase of over 2% as well.