Stock futures declined on Wednesday, following a third consecutive session of losses for major equities indexes, as bond yields continued to rise in the context of elevated oil prices. Futures for the Nasdaq 100, S&P 500, and Dow Jones Industrial Average indicated declines of 0.6%, 0.3%, and 0.2%, respectively, in the latest trading session. Yesterday, the U.S. stock market commenced September on a negative trajectory following robust gains in the previous month, as escalating oil prices and increasing Treasury yields dampened investor sentiment. The tech-focused Nasdaq Composite, blue-chip Dow, and benchmark S&P 500 concluded the trading session with declines of 1%, 0.8%, and 0.7%, respectively, as the Dow experienced a reduction of approximately 420 points.
Crude oil prices remained elevated Wednesday as the U.S. and Iran engaged in reciprocal military strikes. In the most recent escalation, reports indicate that Iran has targeted American bases located in Jordan, Kuwait, and Bahrain. U.S. benchmark West Texas Intermediate prices increased by 0.3% to $90.50 a barrel, whereas Brent crude futures, serving as the global benchmark, saw a rise of 0.5% to $95.15. With investors apprehensive about the persistence of inflation due to elevated oil prices, the yield on the 10-year Treasury note – which affects interest rates on various consumer loans, including mortgages – climbed to over 4.81% on Wednesday, marking its highest intraday level since November 2023 and an increase of nearly two basis points from Tuesday’s close. Traders currently assign a 68% probability to the Federal Reserve increasing interest rates at its upcoming meeting later this month, a notable rise from the 37% observed just a week prior, according to the CME Group’s FedWatch tool.
The Federal Reserve is scheduled to publish its Beige Book at 2 p.m. today. The report – which compiles anecdotes from Fed districts across the country – suggested in July that the economy was improving, but also came amid a lull in the U.S.-Iran conflict. Technology stocks, especially within the software and cybersecurity sectors, experienced a decline yesterday, indicating a potential for further decreases on Wednesday. The Roundhill Magnificent Seven ETF, iShares Expanded Tech-Software Sector ETF, Roundhill Memory ETF, and iShares Semiconductor ETF all experienced a decline of approximately 1% prior to the market opening. All of the Magnificent Seven mega-cap tech stocks experienced declines in premarket trading. Apple shares ticked lower after rising more than 2.5% yesterday, marking John Ternus’ first day as CEO following the 15-year tenure of now-retired Tim Cook. Share of Tesla, which is expected to unveil its cybercab Thursday, declined modestly after leading the septet lower with a 3% drop Tuesday.
In the aftermath of earnings announcements, GitLab experienced a notable increase of 20%, Dell Technologies saw a rise of 9%, MongoDB faced a decline of 14%, and Palo Alto Networks registered a decrease of 2%. Broadcom, Snowflake, Hewlett Packard Enterprise, and Five Below are among the notable names set to report results after markets close today. Chevron shares rose less than 1% after it announced plans to expand operations in Venezuela. Bitcoin recently traded at $76,600, a decline from overnight peaks of approximately $77,700. The U.S. dollar index, which monitors the value of the greenback relative to a selection of foreign currencies, registered an increase of 0.2% at 99.83. Gold futures experienced a decline of 1.1%, settling at $4,350 per ounce.
