Nasdaq futures indicated a decline at the open on Thursday, following a day when the S&P 500 and Nasdaq Composite reached record highs. This downturn was influenced by a drop in AI-related stocks, alongside an increase in crude prices and Treasury yields. In recent trading, futures for the Dow Jones Industrial Average, Nasdaq 100, and S&P 500 exhibited declines of 0.9%, 0.8%, and 0.5%, respectively. Yesterday, U.S. stocks concluded the trading session on a downward trajectory, with the blue-chip Dow experiencing the most significant declines, coinciding with the 10-year Treasury yield reaching its peak level since 2002.
Oil prices experienced a significant increase on Thursday following reports indicating that the U.S. is considering the resumption of large-scale operations in Iran, a development coinciding with a rise in tanker attacks in recent days. U.S. benchmark West Texas Intermediate crude futures experienced a notable increase of 4.9%, reaching $92.60 per barrel in recent trading. Meanwhile, front-month Brent crude futures, recognised as the international benchmark, rose by 4.8% to $105. With oil prices on the rise, the 10-year Treasury yield, which acts as a benchmark for various interest rates, increased to above 5.33%, reflecting a four basis point rise from Wednesday’s close. Early yesterday, the yield approached 5.37%, marking its highest level in 24 years.
Stocks associated with AI experienced a decline in premarket trading on Thursday. Roundhill’s Memory ETF was down nearly 2.5% following a similar decline of approximately 2.5% in shares of its heavily weighted component, Samsung, during South Korean trading. This downturn occurred as the world’s largest memory chipmaker reported preliminary third-quarter results that did not meet analysts’ elevated expectations. Micron Technology and SK Hynix, which are also sizable holdings in the Memory ETF, fell about 1.5%. The broader iShares Semiconductor ETF fell almost 2%, while the Roundhill Magnificent Seven ETF, which tracks the Magnificent Seven mega-cap tech companies, slipped less than 1%.
In the aftermath of earnings announcements, PepsiCo experienced an increase of 2%, while Applied Digital saw a rise of 1%. Levi Strauss experienced a decline of nearly 3%. Bitcoin was trading around 82,400, down from overnight highs above 83,500. The U.S. dollar index, which monitors the value of the greenback relative to a selection of foreign currencies, increased by 0.2% to 102.46. Gold futures edged up to 4,145 an ounce.
