Nasdaq futures indicated a downward trend on Wednesday, following the previous day’s achievement of intraday and closing records by the S&P 500 and Nasdaq Composite, amid rising 10-year Treasury yields and increasing crude prices. Futures for the Nasdaq 100, Dow Jones Industrial Average, and S&P 500 experienced declines of 0.7%, 0.6%, and 0.4%, respectively, in the latest trading session. Yesterday, the S&P 500 and Nasdaq Composite achieved new record highs as the 10-year Treasury yield retreated from a 24-year peak. The 10-year Treasury yield, a key indicator for various interest rates, was recorded above 5.34% in recent trading, reflecting an increase of more than five basis points from Tuesday’s close. On Monday, the yield increased to over 5.35%, marking its highest point since April 2002.
Oil prices experienced an uptick as the assaults by Iran-backed Houthi rebels on Saudi targets overshadowed the rise in tanker shipments traversing the Strait of Hormuz. U.S. benchmark West Texas Intermediate crude futures increased by 0.8%, surpassing $90 a barrel, while front-month Brent crude futures, the international benchmark, rose by 1.5% to reach $102. Investors will focus on the 2 p.m. release of the Federal Reserve minutes from the September Federal Open Market Committee meeting. The minutes may elucidate the perspective of monetary policymakers regarding the progression of the tightening cycle following the mid-September interest-rate increase. Traders currently assign a 22% probability to the Federal Reserve increasing interest rates at its late-October meeting, according to CME FedWatch.
Elon Musk-led Space Exploration Technologies, or SpaceX, stock fell 2.5% in premarket trading following a Bloomberg report indicating that the company was in discussions to raise $40 billion to purchase chips from Nvidia. Shares of Nvidia, approaching a $6 trillion market capitalisation, experienced a decline of less than 1%, mirroring the performance of the Roundhill Magnificent Seven ETF, which follows the Magnificent Seven mega-cap tech companies. Shares of chipmakers and other AI-related companies, which contributed to the record-setting performance of the Nasdaq and S&P yesterday, experienced a decline on Wednesday. Roundhill’s Memory ETF pulled back 1.5%, while the broader iShares Semiconductor ETF fell by a similar percentage as components Marvell Technology and Advanced Micro Devices declined after surging yesterday.
Shares of Constellation Brands dropped 6% before the bell after beer depletions, a proxy for underlying demand, unexpectedly declined and the midpoint of its affirmed full-year profit guidance was below analysts’ expectations. Levi Strauss and Applied Digital are slated to report results after markets close today. Crypto-tied stocks such as MSTR, Coinbase Global, Robinhood Markets, Mara Holdings, and Circle Internet Group experienced a decline as bitcoin retreated to $83,700 from overnight peaks of approximately $85,700. The U.S. dollar index, which measures the value of the greenback relative to a selection of foreign currencies, increased by 0.5% to 102.35. Gold futures decreased by 1% to $4,145 per ounce.
